SEBON allows 24-hour order placement; new circuit breaker rules from Monday

Share investors in Nepal will now be able to place buy and sell orders 24 hours a day following the approval of amendments to the Securities Trading Operations Bylaws 2018 by the Securities Board of Nepal.

The revised regulations allow investors to submit buy and sell orders at any time, eliminating the need to wait for regular trading hours. This change is intended to address the difficulties faced by Nepalis living abroad and others who were previously unable to participate in the secondary market due to time constraints. It is also expected to encourage investors from the primary market to enter the secondary market through off-hour order placement.

NEPSE had proposed updates to its Securities Trading Operations Regulations 2018 to align them with current market needs. The Securities Board approved the proposal with modifications, including changes to circuit breaker provisions, stock price fluctuation limits, and order placement timings. While NEPSE initially proposed three circuit breakers, the approved regulation reduces them to two. Similarly, the proposed off-hour order window of 6 PM to 6 AM has been expanded to allow order placement around the clock.

Under the new system, even after the market closes at 3 PM, investors can continue to enter buy and sell orders. These orders will be based on the last traded price of the day, with a permissible adjustment of plus or minus 2%. NEPSE’s regular trading hours will remain unchanged, running from 11 AM to 3 PM, with a pre-open session from 10:30 AM to 10:45 AM. However, outside these hours, investors can place orders online at any time.

The revised regulations have already been approved by the Securities Board and will be implemented after endorsement by NEPSE’s board of directors, which is expected shortly. NEPSE has also upgraded its trading system to support the new provisions. The system will come into effect once NEPSE releases the necessary operational guidelines. 

Additionally, SEBON’s new circuit breaker structure will come into effect this Monday following Friday’s approval by the NEPSE’s board. Last week, SEBON had approved the revision of its circuit breaker rules introducing a new structure. The existing three-tier system has been replaced with a two-tier system. Under the new rules, if the NEPSE index rises or falls by 5% within the first two hours of trading, trading will be halted for 15 minutes. If, after reopening, the index changes by 8%, trading will be suspended for the rest of the day.

Previously, the system imposed a 20-minute halt for a 4% change within the first hour, a 40-minute halt for a 5% change after reopening, and a full-day closure for a 6% movement.