Brokers in Nepal’s stock market have been pushing for a “multiple DP” system for a long time. The idea is simple — investors should be able to operate more than one demat account across different brokers without loopholes that hurt the market.
But despite repeated demands, the matter has been stuck at the Central Depository System and Clearing Limited (CDSC) for months.
What’s causing the delay?
According to CDSC spokesperson Suresh Nyaupane, there are both technical and policy hurdles. CDSC needs to identify inactive accounts, close them easily, and ensure that one person is not opening accounts in multiple places without proper tracking. They are currently working on a plan to handle unrenewed accounts.
Stock Brokers Association of Nepal president Sagar Dhakal says progress has been zero so far. He explains that problems arise when an investor buys shares from one broker but sells them through another without clearing payments to the first.
For example, if an investor deposits Rs 25 lakh as collateral, brokers may allow trades worth up to Rs 1 crore on trust. But when shares move to another DP and are sold elsewhere, the first broker is left unpaid — and sometimes, the investor disappears altogether.
In today’s market, many investors buy 100% of their shares by keeping just 25% as a guarantee. The trend of using BO-to-BO transfers and selling through another broker is increasing, causing more financial risk for brokers.
Even though the current rule allows only two DPs per investor, many still manage to open multiple accounts — and until CDSC takes action, brokers say the problem will keep growing.
