Issuing a circular on Wednesday, NEPSE has warned members to deny investors from entering the purchase order above the actual collateral limit and carring out activities that show temporary demand in the market.
NEPSE has made mandatory to take at least 25 percent of the estimated amount in advance while placing the purchase order as per Securities Trading Operation Bylaw, 2075, Regulation 8 (1). NEPSE took the action after it discovered that some brokers allow investors to place order exceeding their collateral limit by many times. Moreover, it detected that the investors later cancel such orders after creating fake demand.
According to NEPSE's supervision section, action will be initiated as per the prevailing laws if the transaction is found violating the provisions of the bylaws. The move is expected to protect the interests of genuine investors by controlling the abnormal volatility in the market.
