KATHMANDU, JUN 28 -
The committee, formed to prepare an action plan for Citizen Investment Trust (CIT) to operate it as a market maker in capital market, has suggested amendments to Merchant Bankers Regulation 2008 and upgradation of infrastructure of Nepal Stock Exchange (Nepse) and the trust.
The four-member committee is about to complete the action plan that will be a modality on how the CIT work as the market maker and how other parties could support it. The committee is headed by Nabaraj Adhikari, head of planning and development department at the Securities Board of Nepal (Sebon).
According to the CIT, about 75 percent of the task has been completed and the committee will submit the report within two weeks. “In the report, we have pointed out various issues that need to be addressed so that the CIT can operate as the market maker,” said a committee member. “The report has assessed the existing infrastructure, human resources, market scenario and existing regulations and we have found that much is needed to be done in order to materialise it.”
Beside the upgradation of existing infrastructure (both hardware and software) of Nepse, the committee has also recommended for the improvement CITin infrastructure as well as human resources at the CIT. “Similarly, changes should be made in the existing Merchant Bankers Regulation 2008 to regulate market maker,” said the member.
CIT Executive Director Rishi Ram Gautam said that once they receive the report, they would discuss those issues in the board meeting before endorsing it. Upon its endorsement by the CIT board, the action plan will be presented before various stakeholders like MoF and Sebon among others for approval. “Once the action plan is approved we will immediately start building infrastructure and creating a fund,” said Gautam. “We need to build separate structure within the CIT to work as a market maker.
Various government agencies like Employees Provident Fund, Rastriya Beema Sansthan and Nepal Telecom have potential of investing billions in the fund. However, they are yet to decide the size of the fund.
Market maker in the capital market is a firm that accepts the risk of holding a certain number of shares of a particular security in order to facilitate trading in that security. Experts say that market maker can give much needed stability to Nepali capital market which at time has been very volatile.
Source: http://www.ekantipur.com/2012/06/28/business/cit-urged-to-improve-on-existing-regulations-infrastructure/356275/
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