Kathmandu. NEPSE Revised procedure regarding margin trading facility has implemented from 2022 April 27. The regulatory body Nepal Securities Board had first amended the said procedure issued on 2075 BS. Nepse has implemented the procedure within a year of the amendment by the board.
As the procedure amended by the board is applicable from the date fixed by Nepse, this procedure has been implemented according to the same arrangement. Investors will now be able to get 70 percent loan through brokers from the procedure amended by the board. Earlier, only 50 percent was available. According to the amended provision, investors can pledge 30 percent of the amount or equivalent of that value.
Investors are allowed to lend on the basis of 120 days average price or whichever is less than the market value when valuing the shares pledged for margin loans. Earlier, the pledged shares had to be valued on the basis of 180 days average price.
Earlier, investors were allowed to keep only 10 percent of the money received from the broker in one company, but the revised procedure has made it possible to invest in more than one company. Investors have to maintain a minimum margin of 20 percent each day. It has been said that the value of share pledge should not be less than 20 percent.
If the value of the share pledge cannot be maintained at least 20 percent, the broker will call the margin to increase the amount. If the share pledge price falls to 15 percent, the amended provision states that the shares should be sold four days after the broker informs the investors. Provision has been made to keep the amount of the sale of shares by the broker as collateral up to 20 percent.