The Dhaka Stock Exchange is the prime bourse of the country. Through its highly fault-tolerant automated trading system, the exchange can offer facilities for smooth transparent and highly efficient provisions for secondary market activities of shares, debentures and wide varieties of others securities. Managed by a 24 members strong Board of Directors, the overall operations of the exchange is professionally run by a team of qualified executives. The Dhaka Stock Exchange is the rallying point for enterprises to raise capital in Bangladesh. With a nationwide membership of over 238 brokers and dealers, DSE espouses shared vision of Bangladeshi businesses all over. The exchange maintains the lead in providing the perfect launch pad to raise capital by mobilizing savings of general people to set up large industries.
1.1 Brief History of DSE
The DSE was first incorporated as the East Pakistan Stock Exchange Association Limited on
April 28, 1954. However, formal trading began in 1956, 196 securities listed on the DSE with a total paid up capital of about Taka 4 billion. On June 23, 1962 it was renamed as East Pakistan Stock Exchange Limited. After 1971, the trading activities of the Stock Exchange remained suppressed until 1976 due to the liberation war and the economic policy pursued by the government. The trading activities resumed in 1976 with only 9 companies listed having a paid up capital of Taka 137.52 million on the stock exchange. In May 13, 1964 it was renamed as Dacca Stock Exchange Limited. In 1986 it was renamed as a Dhaka Stock Exchange Limited.
As of 30th December, 2008 there were 412 Securities listed on the DSE with a market capitalization of Taka 1043.80 billion. Total turnover value as on December 30, 2008 was tk. 4.31 billion.
Major Events of DSE:
Incorporated as East Pakistan Stock Exchange Association Ltd.:
28th April 1954
Start of Formal Trading:
Renamed as East Pakistan Stock Exchange Ltd.:
23rd June 1962
Renamed as Dacca Stock Exchange Ltd.:
13th May 1964
Trading Suspended under new State Policy:
16th December 1971
Trading Resumed in Bangladesh:
16 August 1976
Starting Of All Share price Index calculation:
16th September 1986
Share price Indices calculation on basis of IFC Designed formula:
1st November 1993
Starting of Automated trading:
10th August 1998
Starting Of DSE-20 Index calculation:
Starting Of DSE General Index calculation:
27th November 2001
Start of CDS through CDBL:
24th January 2004
DSE All share price Index (DSI) Re introduced:
28th March 2005
Dhaka Stock Exchange Limited
Dhaka Stock Exchange Ltd. is a public limited company under the Companies Act 1994. It is a Self Regulatory Organization and its activities are regulated by
Memorandum & Articles of Association
Own (set of) regulations and Bye-laws
Companies Act 1994
Securities and Exchange Ordinance 1969
Securities and Exchange Rules 1987
Other relevant laws of Bangladesh.
DSE has two tier of organizational setup – the Board of Directors called the who all are responsible for policy making and the other level is the management committee who all are responsible for conducting day to day operations and internal management of the DSE and also to implement the policies as formulated by the Council.
Council: The Council is responsible for policy making only. It consists of 24 members by Article 74 (1) as mentioned below.
- 12 councilors are to be elected from members.
- 12 selected councilors.
- One councilor to be nominated by the Ministry of Finance (Finance Division) not below the rank and status of Joint Secretary.
- One councilor to be nominated by the Bangladesh Bank from amongst its officers of or above the rank of General Manager.
- President of institute of Chartered Accountants of Bangladesh, ex-officio.
- President of Federation of Bangladesh Chamber of Commerce and Industry, ex-officio.
- President of Metropolitan Chamber of Commerce and Industry, ex-officio.
- President of Dhaka Chamber of Commerce and Industry, ex-officio.
- One councilor to be nominated by the Ministry of Industry not below the rank and status of joint Secretary.
- One councilor to be nominated by the Ministry of Commerce not below the rank and status of joint Secretary.
- President of Supreme Court Bar Association, ex-officio.
- Head of the Department Finance/ Economics, Dhaka University, ex-officio.
13 DSE Management
As per Article 105B, the management is totally separated from the Council. A highly qualified and trained professional Management Team is running Day to day operations and the Chief Executive Officer is the head of Management Team of the Exchange. The Management team runs independently under policies set by the Board of Directors. Other members are the Secretary, Financial controller and IT-Director.
Presently DSE has 238 members who are the Shareholders of this Public Limited Company, having last quoted price of Tk300 million. The members are licensed by the Securities and Exchange Commission (SEC) for conducting trading as stock dealer or broker. Membership to the bourse is to foreigners.
1.5 Functions of DSE
The Major functions are as follows:
· Registration of every DSE Broker/Dealer under the Membership regulation of Security Exchange commission (SEC).
· Completion of regulatory formalities regarding the transfer of existing membership (share).
· Yearly renewal of registration of all membership from SEC.
· Competition of all formalities regarding the registration of new members by SEC.
· Collection and preservation of yearly audited Balance Sheets of member houses and submission of one copy to SEC.
· Completion of all formalities regarding the registration of new/fresh authorizes and sending to SEC for registration.
· Renewal of registration of existing authorized representatives from SEC
· Registration of authorized switched off from one member house to another.
· Maintenance of updated information regarding all the members through Database
· Maintenance of all member files and all letters, documents, etc. related to members.
· Communication with members for members for training provided by DSE
· Contact with the CEO and Board of Directors and set up the schedule of Board meeting
· Preparation of minutes of the Board meetings and Committee meetings and get those minutes signed by the CEO and Board of Directors
· Communication with Securities and Exchange Commission regarding the decisions of the Board as per requirement of the Board and SEC.
· Preparation and maintenance of all documents relating to Board meeting and Committee meeting.
· Forwarding of letters, documents, etc. to SEC, Member firms and other institutions.
· Receiving and filling of all documents, letters, etc. from SEC, member firms and other institutions.
· Issuance of departmental circular, IT announcement, etc.
· Coordination of all activities relating to the maintenance of Investor’s protection fund
· Any other action as required by CEO.
· Filling and keeping filed positions in the organization structure.
· Identification of job requirements and selection, recruitment, placing and planning the careers of existing and new officers’ employees in accordance with job requirements.
· Provision of training and otherwise development of both candidates and current job holders so that they can perform tasks effectively and efficiently.
· Continues check up of attendance and leave status of officers and employees and reporting to the CEO.
· Submission of Annual Confidential Report (ACR) of all employees to the CEO.
· Maintenance of updated information regarding all officers and employees
Training Programs on different Grounds are arranged here, likely;
Authorized Representative Training.
New Member Training.
New Authorized Representative Training.
Investors awareness Training.
Moreover, additional training programs are arranged if any inclusion in the Capital Market.
Logistic, Maintenance and Protocol Department of DSE is involved in providing all types of logistic and protocol services as per requirement.
· Collections of member’s dues.
· Preparation of bills for listing fees.
· Collection of listing fees.
· Follow up of listing fees realization and receivables from listed companies.
· Maintenance of liaison with banks.
· Dealing with important matters and L/C when necessary.
· Net capital balance collection from members and reporting to SEC.
· Any other duties as and when required.
· Insurance of members and DSE staff.
· Supervision send assurance of the logistic and supply chain of DSE.
· Procurement/purchase of logistic items to run smoothly.
· Monitoring the responsibilities of logistic support units.
Functions of Maintenance:
· Maintenance 0f 1250 KVA substation (1250 KVA transformer, 11 KV H.T switch gear, 2000 ALT 400 Emergency control panel).
· Maintenance of 250 KVA & 30 KVA generators.
· Maintenance voltage stabilizer of IT main server & lift power supply.
· Maintenance of lift.
· Maintenance of Photocopier.
· Maintenance of power distribution at all the floors in 9/E and 9/F, DSE.
· Maintenance of the PABX system.
· Maintenance of air cooler of DSE office.
· Taking care of all office, toilet & lighting of 12 floors in DSE.
· Maintenance of all types of electrical applications and supervision of related activities.
· Maintenance of pump (water supply).
Research, Development & Information Department
- Listing of companies.
- Providing the market place for trading of listed securities, settlement of trading.
- Publication of daily index and Monthly Review etc.
- Monitoring the activities of listed Companies.
- Listing of Companies.(As per Listing Regulations)
- Providing the screen based automated trading of listed Securities.
- Logistic, Maintenance & Protocol Department
- Research, Development &Information
- Publication Department
- Public Relation Department
- Security Department
- DSE Training Academy
- Personal office in CEO.
- Functions of Membership Affairs:
- Functions of Board Affairs:
- Functions of HRM, Admin & Training Affairs:
- Logistic, Maintenance & Protocol Department:
Settlement of Member’s Margin:
- Collection of security deposit as margin within trade.
- Disbursement of security after maturity.
- Maintenance of margin account such as demoted shares, FDR, Bank Guarantee.
- Preparation of charges against margin.
Data collection and processing and preparation of statements
- Daily and monthly clearing accounts.
- Daily and monthly clearing reconciliation.
- Maintenance Tax account daily and monthly.
- Transfer of fines, interest and other charges monthly.
FUNCTION OF CLEARING HOUSE (SHARE) DEPARTMENT
- Reception, reconciliation and delivery of shares to member houses everyday.
- Assurance of share settlement and clearing in time.
- Settlement of margin
- Taking necessary actions in case of violation of margin rule by member firms.
- Preparation of list of defaulter members and adoption of necessary actions against the defaulters.
- Preservation of DSE share volt.
- Communication with listed companies as and when requires.
DISPUTED, ODD LOT, BLOCK SHARES & SPOT TRADE:
- Verification of disputed share (fake, reported, lost, stolen) settlement and correspondence with listed companies and member firms in this regard.
- Supervision of receiving and delivery of good shares against any defective share.
- Arrangement of receiving and delivery of odd lot shares and block shares.
- Settlement of spot transaction of physical shares.
- Settlement of spot transaction of CDBL shares.
- In case of default in settlement of spot transaction of physical shares and CDBL shares, proper reporting for the suspension of defaulter member.
- Settlement of bonus, dividend and other benefits on demate shares not transferred into CDBL for unavoidable circumstances.
- Assurance of share settlement and clearing in time.
- Preparation of defaulter list.
- Preparation of selling out and buying in list of shares.
- Communication with listed companies as per requirement.
DSE FULL SERVICE DP
DSE DP provides DP services to brokers and dealers who are trading participants that is who cannot provide DP services to their clients.
DEMATE / REMATE ACTIVITIES
Completion of all activities relating to the conversion of shares from physical to electronic from (Demate) or electronic to physical form (Remate)
- Verifications and receiving of physical share in order to demate shares.
- Entrance of shares off line.
- Upload of shares on line.
- Check up of demate confirmation.
- Check up of demate pending status, collection of pending shares and re-entry of rejected physical shares.
- Verification of demate share in order to remate shares.
- Entrance of shares off line.
- Upload of shares online.
- Check up of remote confirmation.
BO ACCOUNTS SERVICES
- Opening of BO Accounts for beneficiary owners account holders refereed by trading participants.
- Providing services to beneficiary owners in time.
- Reception of pay in form, verification of signature of BO and existence of shares.
- Pay in set up of shares off line and upload online.
- Reception of pay out from members, verification of signature and the existence of shares.
- Approval of pay out by another person and upload online.
- Liaison with issuer to solve the demate problem.
- Liaison with BO account holders and answer their quarries.
- Liaison with CEO and other departments.
- Liaison with CDBL.
(C). OPERATION DIVISON:
Procedure of general monitoring:
General Observation (General documents related with share trading):
Special observation (Monitoring House Activities as Depository participant):
Monitoring Department conducts special monitoring in brokerage houses according to SEC order through their inspection report. The procedure is same as general monitoring. The department conducts some other monitoring from time to time. They are as follows:
One of the main responsibilities of Monitoring Department is to ensure compliance with Securities and Exchange rules and investigate any fraudulent activities in respect of securities market operations.
This department assists DSE in various legal matters such as
Another important department of Dhaka Stock Exchange is Surveillance Department.
Its functions broadly describe in under below:
Functions of Surveillance Department:
On line Surveillance:
For detecting potential market abuses at a nascent stage to reduce ability of the market participants to unduly influence the price & volume of the scripts traded at DSE by accessing into orders & trades of members.
Off-Line Surveillance: Monitoring of
Conducting in-depth investigations based preliminary enquiries/analysis of trading of the scrip. In Case of irregularities observed, necessary actions are initiated or investigation case is forwarded to SEC through the CEO, if necessary.
2. POSITION MONITORING:
The Surveillance Department closely monitors outstanding exposure of members on a daily basis. For this purpose, it observes various off-line market monitoring reports. The reports are scrutinized to ascertain whether there is excessive purchase or sale position build up compared to the normal business of the member, whether there are concentrated purchases or sales, whether the purchases have been made by inactive or financially weak members and even the quality of scrip’s is considered to assess quality of exposure. The following key areas are examined to assess the market risk involved –
Online Monitoring of Broker Position
Surveillance closely monitors broker’s gross turnover exposure for ensuring margin calls in time.
- Surveillance Department
- Monitoring, Investigation & Compliance Department
- Legal Affairs
- Listing Department
- Market Operations
IPO Related Functions
- Processing and evaluation of the draft prospectus of IPO.
- Evaluation of Financial Statements of new companies to be listed and preparation of the IPO comments for Securities and Exchange Commission.
- Preparation of daily market report to reflect the state of the market & share prices at a specified time & distribution to the CEO.
- Submission of routine weekly report of market monitoring of Surveillance Department to the Commission.
- Submission of routine weekly report of foreign trades to Commission.
Web Development Department
2.2.Contribution of M/A Department
The membership Affairs Department provides various assistances to the members to operate efficient transaction of Stock Exchange. The Membership affairs department contributes in following work –
- Registration of Stock broker and Stock Dealer.
- Opening new Branch
- Approval of the existing branch.
- Approval of the extension branch office.
- Authorize representative Appointment.
- Withdrawal of the authorized representative.
- Renewal of the authorized representative certificate.
- Issuing stock broker and stock Dealer certificate.
- Renewal of stock broker and stock Dealer certificate.
- Issuing of trading work Station.
- Miscellaneous members related works.
This department focuses on collecting necessary document and after sorting all the document, complete set of the document go to due authority for final approval. Complying Rules and regulation the department arrange document for final approval. The department always remains alert to fulfill DSE member’s requirement.
2.3 Functions of M/A Department
1. Registration of every DSE Broker/Dealer:
Membership of DSE facilitates a person prospects to be a Trading members (Stock Brokers) of the Exchange through compliance of the regulatory Provisions of DSE and SEC. There are 238 members in DSE all of whom are corporate bodies.
The eligibility criteria for the membership according to Regulations, 2000 of SEC are as follows:
- A corporate body with a minimum paid up capital of BDT 2.5 million.
- Any partner or director thereof as the case can not be
§ Less than 21 years old
§ A bankrupt announced by CIB of Bangladesh Bank
§ Person of unsound mind
§ A member of any Stock Exchange
§ Person convicted by a competent court of an office involving moral turpitude or any misconduct
§ A Merchant Banker , Portfolio manager, trusty of Mutual Fund
§ A person of insolvent by court. etc
If someone is eligible to be a member of DSE, he/she thereby may apply for the membership of DSE. The interested party must have to issue a forwarding letter and submit the necessary papers and documents to the DSE. The forwarding letter along with the name of all the documents is given in the following page.
After sorting the documents the department needs to send to the Securities and Exchange Commission for license. DSE announce the license through MOP’s Announcement for starting of trading depicting the license number and other details. Then it needs to register the office or location where they want to start trading along with allocation of TWS applied for.
Dhaka Stock Exchange Ltd.
Stock Exchange Building
9/F, Motijheel C/A., Dhaka-1000
The Board of Directors Date ……
Dhaka Stock Exchange Ltd.
9/F, Motijheel C/A,
I on behalf of——————————————————————————- Ltd. desire to be a shareholder and member of the DSE Ltd. and I hereby agree, if selected for the same, to be bound by the Memorandum and Articles of Association of DSE along with all the laws, Bye-laws, and Regulations made or to be made hereafter for the Governance of the Exchange or the business thereof.
We herby apply for one share with particulars given below as required by DSE.
- A. Additional requirements FORM duly filled in & signed.
- Original Share Certificate # 000——— along with share transfer FORM 117 (duly filld in & signed) and Share transfer stamp of Tk. ———– duly cancelled by company’s seal.
- Memorandum and Articles of Association – 2 copies (Certified copies to be enclosed)
- Certificate of Incorporation
- Vendors Agreement – Original
- SEC Registration Certificate
- Board Resolution regarding application for membership representation and signing Authority
- Form XII in original
- Photocopy of Bank A/C Certificate
- Photocopy of TIN Certificate
- Photocopy of Trade License
- BIO-DATA of each Director
We are intending to look after whether the DSE Membership Companies are following different corporate formalities. Different formalities such as, employment of Auditors, arranging of EGM, AGM, Board Meetings timely, various formalities relating to the Office of the Registrar of Joint Stock Companies and Firms and some other related tasks.
15. Change of DSE Membership Representative:
The Member Representative of the Member Company is needed to be changed due to his/her death or desire of the member company. The member company has to submit the following documents for changing its membership representative:
- Bio-data with passport size photograph of new Membership Representative.
- Board Resolution regarding the appointment of new Membership Representative
- Latest Form XII (Particulars of Directors) being certified by Registrar of joint stock companies and firms.
- Photocopy of Appointment Letter of new Membership Representative.
- Filled in Undertaking (Form Ka) as per CIB (Credit Information Bureau) prescribed format- 03 sets in original
- Notarized Affidavit in original on Non-Judicial stamp of Tk. 50/= of new Membership Representative
- Guarantee and Undertaking in original on Non-Judicial stamp of Tk. 150/= of new Membership Representative.
After sorting the documents DSE decides to change the Membership Representative of the respective member company.
The department has to perform various related jobs likely;
- Delivery of Share Certificate after completion of formalities,
- To assist the Department of Board Affairs relating Board Meetings, DSE Annual Return,
- To assist in arranging DSE Annual General Meeting,
- Maintenance of Books of Board Minutes,
- To perform as per the orders of the High Officials time to time.
This section deals with data entry in the DSE’s Central Database, websites and other related links. The changes of DSE Member Representative and other changes are given entries into the different links.
This section deals with renewal of Membership licenses, authorized Licenses along with application for new approval of License to SEC. As per the SEC rules and regulations the renewal processes have to be complied with defined time frame and specific charges.
Forms used in this department:
Form “Ka” and “Cha” – Registration for Stock Broker/Dealer.
Form “Kha” – Appointment of Authorized Representative.
Form “Ga” – Registration Certificate.
Form “Gha” and “Chha” – Renewal of Stock Broker/Dealer and Authorized Representative’s Certificate.
2.5 Strengths and Weakness of M/A Department
Enthusiastic & Empowered workforce
Friendly work environment
Strong rules & regulations
Modern equipment technology. etc
Supportive work environment. etc
Limited number of manpower
Lack of maintenance of Rules &
Pressure of Stock Broker/Dealer
Increasing number of Member
Violation of Rules & Regulations
In seriousness of employee
The Capital Market is becoming larger day by day with the increase of Member Companies as well as Branches in countrywide. So the activities of Membership Affairs department are increasing rapidly.
Category of Work
Conversion of limited companies
Registration of Authorized Representatives
SEC approval of Branch Offices
Issuance of both Stock Dealer & Stock Broker
3.1 Financial Performance of DSE
Financial Performance of DSE
During the year 2007-08, DSE earned a total revenue of Tk.42.410 crore as against Tk. 18.84 crore in the previous year and a total expenditure of Tk. 16.94 crore as against Tk. 11.01 crore in the previous year leaving an operating income of Tk. 25.48 crore as against of Tk. 7.33 crore in the previous year. In addition during the year 2007-08 DSE earned a net interest revenue of Tk. 1.57 crore in the previous year leaving a net profit of Tk. 35.84 crore as against Tk l8.89 crore in the previous year.
Dhaka Stock Exchange performance from March 2004 to February 2009 is shown below through the graph. On an average the stock market has been rising. Except in the year 2005, the market was booming. But from the year 2007 the marker is increasing. Investors are aware of their investment. They judge the potentiality of companies. From any time in the past the investors are more concern about their investment. Besides listing in the stock market for good companies including banks created a huge response from the investors. That also indicates that investors are ready to invest their money in good companies.
Figure: Performance from March 2004 to October 2009
DSE has three major indices to reflect market behavior namely DSE All Share Price Index, DSE General Index, and DSE 20 Index. All share price index (DSI) is now the benchmark price barometer. The stock market barometer registered a downward trend during the period of November 2008 to October 2009 in the DSE General index. Though its go up during mid November, 2008, again it moves downward trend and fluctuate up to end of October 2009.
Figure: Market Performance of October 2009
The DSE 20 index has the basis of 700 base-indexes. The DSE 20 index stood at 2200 points and DSI index stood at 2800 points. On the other hand DSE GEN index stood at 3300 at the month of October, 2009. Then started to decline & continued few months & again increasing.
DSE Sectoral Performance – October 2009
Tk. in mn
Sector-wise performance October-2009
Turnover US$ (Bn)
* Up to October 2009
Figure: Sectoral Turnover October 2009
Financial sector dominated the DSE turnover, accounting for a 27.39 percent of the total DSE turnover in October, 2009 with Bank stocks on the top while manufacturing sector contributed second highest turnover with Engineering sector contributed for 12.32 percent. In volume wise, Investment companies took the lead while Pharmaceuticals, Food and Textile sector followed the rally. In terms of value, Bank, Pharmaceuticals and Fuel & Power, Textile and Engineering Sector dominated the DSE turnover, accounting for 17.74 percent, 8.80 percent, 19.18 percent, 10.92 percent and 12.32 percent respectively.
Performance of DS 20 – October 2009
GQ Ball Pen
Foreign Trade Turnover at DSE
Buy (Tk mn)
Sell (Tk mn)
Net (Tk mn)
Total (Tk mn)
Total (US$ mn)
% of Total Traded Value
* Up to October 2009
Key Market Indicators 2004-2008
DSE General Index
% of Change
All Share Price Index
% of Change
% of Change
Market Cap in bn Tk.
% of Change
Turnover in mn Tk.
% of Change
These are the key market indicators of Dhaka Stock Exchange (DSE) for 2004 to 2008. During the said time, an increasing trend was appeared from the value stated in table. This scenario will be clearer through following graph. The numbers of listed securities of DSE in increasing at increasing rate over the year. In 2004, it was 256 and in 2008 it arrives at 412.
Figure: Total Number of listed Securities
Figure: Highest Market Capitalization, 2004-2008
From the following graph (figur-2), we can see market capitalization has tremendiously increased in last two year. The highest market cap in 2006 was tk. 315 billion but it was tk. 758 billion and tk. 1044 billion in 2007 and 2008 respectively. Finally in recent time, at 19th March, 2009 DSE made the peak with turnover of tk 648 crore.
Figure: Highest Market Turnover, 2004-2008
Paper and Printings
Fuel & Power
Service & Real Estate
Figure: Sector Wise Dividend Performance, 2008
CENTRAL DEPOSITORY SYSTEM
4.1 Concept of Central Depository System
Central Depository Bangladesh Limited was incorporated as a public limited company on 20th August 2000 to operate and maintain the Central Depository. It will provide following support to the stock market/investors.
- Electronic Book Entry, recording and maintain securities accounts.
- Registering transfer of securities: changing the ownership without any physical movement or endorsement of certificates.
- Execution of transfer instruments, as well as various other investors services including facilitation of the secondary market trading of Treasury Bills and Government Bonds issued by the Bangladesh Bank.
A central depositor is like a bank for share instead of money. Instead of holding shares in the form of certificates, investors have accounts in the depository and are; able to move securities and settle stock exchange transactions by an electronic update of their accounts. Virtually all established markets have depositories including India, Japan, Malaysia, Pakistan, Sri Lanka, and Thailand, UK and USA.
Listed Company Related Functions
- To communicate with all the listed companies regarding the compliance of relevant rules and regulation.
- Assurance of timely disbursement of corporate announcement.
- Monitoring of listed companies for the compliance of listing Regulations, Company Law and other relevant rules.
- Announcement of half yearly and yearly performance of listed companies through the trading system.
- Evaluation of performance of listed companies and update listed company records.
- Processing of approval for transfer of share outside the trading system.
- Processing and recording of all types of transfer / sale or buy of shares of Sponsors/Directors.
- Processing of application of gifting of shares as well as transfer of shares in special circumstances.
- Taking subsequent action for corporate announcement as per rules and regulation.
- Adoption of all necessary actions required for Book Closure/Record Date and other corporate benefits.
- Trade suspension or trade halt age of listed companies and members also during the trading hour considering the necessity of market operations.
- Protection of investor’s interest in the listed companies when any anomaly is observed in DSE.
- TWS set up monitoring
- Room verification
- DP- monitoring
- Any other monitoring ordered by CEO regarding violations of Securities
- rules by any listed company with DSE or any brokerage house.
- Company Monitoring ordered by SEC any directed by CEO.
- Account opening Form
- Buy Sale order Slip
- Trade confirmation Statement
- Buy/Sale order register
- Money receipt
- Payment Voucher
- Share receive and Delivery certificate
- Broker/dealer license
- Authorize registration certificate
- Client ledger.
- Stock report.
- Bank Account Statement.
- Net Capital Balance position.
- Deed of Margin Agreement between member and investor (if possible).
- Compliance report.
- Compliant register.
- BO account opening for
- Pay in slip
- Pay out slip
- BO stock report
- Find discrepancies and variability of houses activities and generating report.
- Inform the concern house about their deficiencies.
- Aware them about securities rules and provide feedback to the house to overcome deficiencies regarding any lapse in operating house activities and also try to re from them in order to rules and regulations.
- Final report submits to the Securities and Exchange Commission about house status. Monitoring department monitors the activities of at least 5 brokerage houses in each Calendar month.
- TWS set up monitoring: Monitoring department inspect the set up of TWS according to TWS installation and user manual.
- Room verification: Monitoring department inspect brokerage house office premises whether they are properly decorated and suitable for business.
- DP – Monitoring: Monitoring Department inspect DP activities of the brokerage house regarding their pay in, pay out, and other activities as DP.
- Correspondence with outside solicitors if any litigation arise against DSE.
- Assists in any other legal matters of DSE.
- Settlement of dispute that arises out by death of members or un settled claim by the member.
- Arrangement of hearing between appellant accused member house and settlement of any undue claim against the house.
- PRICE MONITORING
- High/Low difference in prices.
- Percentage change in prices over a week/fortnight/month.
- Top N scrip by Turnover a week/Fortnight/month.
- Trading in infrequently traded scrip.
- Scrip’s hitting new high/low price, etc.
- Warning to member – verbal/written to members through the CEO are issued when market irregularities in the scrip are suspected
- Impositions of penalty/suspension – penalize or suspend the members through the CEO who are involved in market irregularities, based on the input/evidence available from investigation report.
- Liaising with Compliance Officers of companies to obtain comments of the company on various price sensitive corporate news items appearing in selected News Papers.
- Comments received from the companies are disseminated to the market by way of online news bulletin.
- Investigations based on rumor verifications are carried out, if required, to detect cases of suspected insider trading
- B/S Statement of Trading Members
- Concentrated B/S
- B/S of scrip having thin trading
- Verification of Institutional Trade
- Verification of Foreign Trade
- Verification of Cross Reporting Trade
- Verification of D Form Trades
- Verification of Sponsor’s Trade
- Snap Investigation
- Market Intelligence
- Review block Trades
- Review List of Settlement Failures
- Verification of Company Accounts
- Review of Media Information
- Monitoring on newly Listed Stock
- Development of Good Liaison
- Development of market contacts & to picking up Intelligence.
It is the process to convert physical shares into electronic shares. For this conversion electronic book entry is mandatory.
- Pay in:
It is a form that acts as a cheque. Normally, the process of transferring shares from B/O account to clearing account is called pay in. When the B/O sell his shares then he signs in the pay in form.
There are some merits of CDS:
- By converting physical certificate into electronic form will eliminate-the risks of damaged, lost, forget and duplicate of share certificate.
- The core services of depository are the efficient delivery, settlement and transfer of securities through computerized book system.
- Immediate transfer of ownership is possible through electronic book entry.
- This system also helps lending organization to check collateral if it is shares.
- It also helps parent organization to issue IPO’s, bonus shares, and/or right shares quickly and conveniently.
- It also saves expenditure of issuing company from printing physical share certificate.
4.4 Demerits of Central Depository System
Very costly technology is required.
- Fully depends on power supply.
- Full concentration is required always otherwise share may be transferred to other DP.
- Easily can cell the share of any B/O by others, if anyone can copy the sign of any B/O.
- Fully depends on computerized system that may crash any time.
4.5 Guidelines to Overcome Problems
- The trading was not efficient.
- In the period of trading activities were not transparent.
- In that time it lacks breath and depth.
- Its regulatory mechanism either self-discipline or by regulatory agencies were not very effective.
- The jurisdictional roles of various regulatory agencies were not well defined.
5.4 Guidelines For Overcoming The Problems
Stock market is a composite term embracing buyers and sellers of securities and constituting all the agencies and institutions that assist the sale resale of the company’s securities. The stock market has some problems. The problems are as follows-
- Lack of market skillfulness.
The general characteristics of the skill market do not exit here. The demand and its controlling management system of securities influence the skillfulness of market. But they are not very satisfactory.
- Lack of confidence of the new investors.
The devastating fall down of share market in 1996 has shattered the confidence of the new investors. Thus, the challenges ahead for Bangladesh stock market are to revamp the share market by restoring confidence among investors.
- Share prices rise inconsistently:
The stock market bubbles up but such rises in the share prices are not consistent with the share market fundamentals.
- Complexity of tax structure:
The tax structure of our country is complex. Some times companies hide their real income because of sickness of industrial sector. As a result, the potential investors can’t take appropriate investment decision because of hidden income.
- The problems of product market:
In our country the industrialists suffer a lot of problems. They lost their eagerness for the unequal market positions. As a result, the rolling of capital decreases.
- Scarcity of foreign investment:
The flow of foreign investment in our country is not satisfactory. But foreign investment is essential for development of stock market.
- The lack of entrepreneur:
The demand of capital is increases if the sufficient creative entrepreneur exists. But we have want of creative entrepreneur.
- Lack of quality securities:
For active stock market high quality of stock is essential. But most of the listed companies are in bad position.
6.2 Guidelines to Overcome The Problems of Stock Market
The following guidelines may be helpful to boost up the stock market in Bangladesh.
- Set up training center for the newly investors in the share market to reduce the risk of the capital market.
- To make the rule easy for paying the income tax.
- Influence the foreign investors by proving the extra facility.
- To make the market easy for product marketing.
- To make the market active by marketing the industry strong.
- To provide training for the present as well as potential entrepreneurs.
- Strengthening the Securities and Exchange Commission.
- To make the easy rule for the establishment of the industry to increase the rolling of capital market.
- To make rule so that high quality securities are bound to come to stock market.
- To provide tax benefit of the listed companies in order to encourage none listed companies to be listed with the stock exchange.
· Research and Development Dept, Dhaka Stock Exchange Limited.