Requirements to Start Trading in NEPSE

Everyone loves profit and making a profitable investment is necessary. Investment of capital in the good sector is crucial to make the earning. The stock market is a good investment opportunity for everyone. In Nepal, the number of new investors in the stock market is coming every day.

Through patience, good information, and planning investors can earn good money in the Nepalese stock market as well. There are more than 260 companies are trading every day. There are a couple of steps that are the basic requirements to start trading in NEPSE.

Also, many companies are issuing initial public Offering to the general public so those company also be listed in NEPSE. More than Rs 14 Arba amount of share is trading in NEPSE floor sheet.

The Nepalese stock market suits both types of investors which are, who can appetite high risk with aiming high profit, and decent investors who expect decent profit with less risk. So, here in this article, we discuss the basic requirement to start trading in the Nepalese stock market.

Table of Contents

Open a Bank Account:

The first step is to open a bank account in any commercial (‘A’) or    Developing bank (‘B). The account should be a saving account. Banks ask for citizenship, 2 photos, and the nominee’s citizenship and photo to open a bank account. Additionally, banks can ask for different documents as per the bank’s rules and regulations.

Open DEMAT Account:

After opening the bank account second step is to get the DEMAT number. DEMAT stands for Dematerialized Account. It is not necessary to open a bank account and Demat account from the same financial institution. Demat accounts can open from ‘A’ and ‘B’ level financial institution and their merchant bank, and in the broker account. DEMAT account facilitates the shareholder to hold their stock in an electronic form.

C-ASBA Account:

C-ASBA stands for Centralized Account Supported by Blocked Amount. Through C-ASBA the investor can apply for IPO in the primary market and right share online. C-ASBA account can open in the bank where you have the bank’s account already. You do not need any extra document to get the CRN number, however, you should have savings account in the same bank and you should pay CRN charge as per bank rules.

Mero Share Account:

Recently, the Mero share account is very useful to apply Initial Public Offering and right share online. Mero Share facilitates investors to transfer their shares in broker account through EDIS. You have to visit the bank where you have a bank account to get this facility.

All banks ask to fill the form then they provide login ID and password through email. You can log in to Mero share through this link In Nepal, more than 2 million people are using this application. Broker Account: Investors do not need a broker to apply for IPO but they need a broker account when they have to sell IPO.

When investors want to buy stock from the secondary market they need a broker account because brokers are those who buy and sell stock on behalf of clients. You need a bank account, Demat account to open the broker account.

There is more than 40 stock broker-dealer in Nepal and they are spreading more than 20 major cities of Nepal. In Nepal, technology is improving in this sector as well. An investor can invest offline and through online TMS. For offline trading, investors should call in broker’s office to buy and sell shares, however, you can buy yourself from home through TMS for that you should deposit some collateral deposit in the broker’s bank account. Online broker user is increasing numbers in Nepal.

The above five steps are the basic requirement to start trading in NEPSE.

How to Start Online Trading in Nepal?

Because of the Covid-19 pandemic in Nepal, “the work from home” concept is following massively. Online TMS help broker and investor to work from home. Capital Market Technology (CMT) provides the facility to open an online broker account from home. More than 20 brokers are using this software in Nepal.

Because of this software, there is a massive increment in the number of investors and the total transaction of shares in a single day. As on the report of 28th May 2021, more than Rs 13 Arba amount is traded in a single day.

Also, NEPSE provides information that more than 60% of active investors are doing transactions through online TMS. There are a couple of documents you need to submit when you apply for online TMS:

  • Bank Account Details
  • Personal Information
  • Three Generation Details
  • Applicant Photo
  • Applicant’s Citizenship Photo
  • KYC form of Broker
  • Online Trading Agreement Form

You have to download and print the KYC and online trading agreement form from the broker’s website and need to fill the form. After filling the form you take a photo of all pages of the form and need to send it along with other documents.  

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