Suresh Neupane, Spokesperson of Central Depository System (CDIS) has informed that the number of transactions in closeout has increased due to investors' unawareness to fill EDIS after selling their stocks.
CDIS data shows that a total of 9,575, 568 transactions went for closeout in six months of the current FY. the transaction amount of the trading was Rs 1.85 billion, hence, the investors paid Rs 73.9 million in penalties for closeout.
The penalty amount has increased compared to Rs 57.7 million of the corresponding period of the last FY. In the last FY, investors paid Rs 153.5 million in closeout penalties.
In the beginning of the current FY, NEPSE index touched the highest point of its history. Going with the volume of transactions, the closeout also increased simultaneously, view some investors. Expansion of the market also attracts new investors. These new investors unknowingly fail to fill the EDIS which has increased the closeout problems, views Neupane.
overall, however, the closeout problem has declined after the meroshare software added the online EDIS feature, even though, the problem has not been solved hundred percent. Only if investors be aware of all the requirements to complete the trading, the close-out problem can be minimized, said Neupane.
Since the launch of online trading, the system first checks DP to give sales orders, thus, it was thought that the closeout problem will wipe out. however, the technological error also plays part in the existence of the closeout problem
the closeout problem is not yet solved because TMS, the only trading system operating, only partly holds DP, said Santosh Mainali, Chairman of Nepal Stock Broker Association. as per Mainali, one of the reasons of closeout problem is the irresponsibility of investors who do not check their accounts before selling. the second reason is the greed of investors who do not transfer ownership after the market goes up. and the third one is the forgetfulness of investors who do not fill EDIS after selling stocks.
