Kathmandu, February 25

The Central Depository System and Clearing Ltd (CDSCL) — a subsidiary of Nepal Stock Exchange Ltd — has sought for request of proposal from commercial banks to work as securities clearing bank.

The banks willing to work as clearing bank have to meet the requirements fixed by CDSCL to qualify to take part in the competition to obtain the licence.

According to CDSCL, the class ‘A’ financial institutions that have high paid-up capital will be prioritised. Also, the banks will have to obtain the membership of ASBA (application supported by blocked amount) from the Securities Board of Nepal (SEBON).

Similarly, interested banks must have obtained licence of depository participant, have a large branch network and also be involved in government transactions to take part in the competition.

CDSCL has said that it will also examine the physical and technological capabilities of the concerned bank to operate as a clearing bank while issuing the licence.

CDSCL is going to add three more clearing banks from only one clearing bank currently. At present, all the works related to clearing of securities are being conducted by CDSCL via Global IME Bank.

CDSCL has started the process to increase the number of clearing banks following the instruction of SEBON. The securities market regulator has instructed Nepse and CDSCL to authorise more clearing banks in view of online trading. Amending the Securities Transactions Clearance and Settlement Regulations last year, SEBON had paved the way to bring in more clearing banks.

CDSCL has expected the clearance and settlement of securities to be more competitive and easier after the establishment of more clearing banks.