NEPALI SHARE MARKETS GUIDELINES TO NEPALESE INVESTORS 2019

NEPALI SHARE MARKETS GUIDELINES TO NEPALESE INVESTORS 

· Place orders: The investors should place buy or sell orders through authorized stock brokers. Investors should submit a written buy or sale orders to the brokers to execute the trading of proposed securities in prescribed format. Investor must mention name of securities, type of securities, quantity of securities, price and the validity period of the order in prescribed formats. If the validity period of order is not specified, it will be valid for 15 days only. The investors should obtain receipt against the deposit of orders in which the broker states date, time and registration number,etc. 

· Obtain notification of purchase and sale of securities: after the execution of the orders, the broker must notify of inform the clients/investors about execution of buy order to purchase or execution of sale order to sale of securities either on the same or next day in prescribed format. 

· Submit either purchase value or certificates: The investors after getting the notification from the brokers must submit total amount including all charges, in case of purchase and certificates of securities, in case of sale within three working days(T+2 days) from the date of transactions.in case of sale order, the seller must hndover to the broker the share certificate along with the signed documents. 

· Update with market information: Investor must obtain sufficient information before investing in securities or before selling the securities. The information can be obtained from newsletters, annual reports, newspapers, websites, etc. 

· Analyze the financial indicators: investors should analyze firms performance, management, important financial indicators such as net worth, return on equity, earning per share, dividend per share, dividend yields, price-earnings ratio,etc. and then only make decision to investment in financial securities. 

· Diversity the risk : Generally, investment in securities, common stock, exposes higher risk. Therefore, investor should try to reduce the risk by constructing well-diversified portfolio. The well diversified portfolio which is the optimal portfolio and minimizes the total risk through the diversification of unsystematic risks. 

· Transfer ownership on time to receive dividend, right shares, and other benefits: Investors must transfer the ownership before book close to receive dividend, claim right share and other benefits. If ownership is not transferred in time investor may not receive dividend, right shares and other benefits. 

· Be informed about trading prices: Investors must be aware that the shares of the same company can be traded at different prices from one transaction to other transactions and one market to another market in a single day. If the investors are in doubt they can check the transaction on floor sheet which shows the details of the transactions of NEPSE website or contact to the concerned authority of stock exchange with notification receipts. 

· Be aware about trading, settlements and clearing procedures : Investors must have knowledge about trading, clearing and settlement procedures. If they do not have idea about these procedurals aspects then different confusion and conflict may take place. It is the right of the investors to obtain detail information about those procedures either with the brokers or from published materials or by stock exchange,etc. 

· Keep touch in with security board, Nepal stock exchange, brokers and other experts: Investors should consult with security bord, Nepal Stock exchange, brokers, and other experts periodically to collect information, analyze the securities, to know the rules and regulations about trading of securities and to satisfy with different queries. 

· Maintain"My world is my bond": The trading of the securities of the investor and services of the brokers is based on the principle "My world is my bond". Hence, both the investors and the brokers should not be deviated from that principle. The investors must support the principle of "My world is my bond" and should provide documents, certificates,payments, etc. the brokers according to the commitment. Broker also should follow the principle by execution the orders in time and information should be given to investors in time. If any unforeseeable events take place the broker must notify the stock exchange and reserve the transactions either by buy or sale according to the nature of transactions.