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Are you able to engage in purchasing and selling share in the stock exchange ?

Are you able to engage in purchasing and selling share in the stock exchange ?. WELCOME TO OUR PRESENTATION. D. GROUP. DEPARTMENT OF ACCOUNTING & INFORMATION SYSTEMS UNIVERSITY OF DHAKA. GROUP MEMBERS. Name ID No.

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Are you able to engage in purchasing and selling share in the stock exchange ?

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  1. Are you able to engage in purchasing and selling share in the stock exchange ?

  2. WELCOME TO OUR PRESENTATION D GROUP DEPARTMENT OF ACCOUNTING & INFORMATION SYSTEMS UNIVERSITY OF DHAKA

  3. GROUP MEMBERS Name ID No. Md. Kamal Pasha 16111 AnindaGhosh 16096 S.M.N JamiulHikma (Sajib) 16103 Md. Rafiqul Islam (Hiron) 16094 Md. Monirul Islam (Monir) 16109 S.M. Rakibul Islam (Sourav) 16100 Al-ImranulAlam (Rabbi) 16183 Md. Robiul Islam 16121 S.M. MoshiurRahman (Rohan) 16184 S.M. Ibne Sad (Anik) 16118

  4. OUR PRESENTATION TOPIC OPERATIONS OF BROKERAGE HOUSE

  5. DEFINITION OF BROKER A person or firm that conducts transactions on behalf of a client. Brokers derive their profit from commissions on orders given.

  6. Types of Brokers Bill and note broker Commercial or merchandise broker Insurance broker Real estate brokers Matchmakers(marriage brokers) Stockbrokers

  7. INTRODUCTION TO BROKERAGE HOUSE A brokerage  house, also called a brokerage firm, is a company licensed to buy and sell stocks or securities on behalf of investors.

  8. Stock Exchange • Shares • Buy • Sell • BrokerageHouse • Investors • Publicly listed Company

  9. History of Brokerage Operation: Before the Liberation War ■ Small number of companies listed ■ Instability in political and business environment ■ Few business investors After the Liberation War ■ Cry Out system up to 1996 share market collapsed. ■ Chittagong Stock Exchange (CSE) established in 1995. ■ Fully automated computerized system was installed on 10 August 1998. ■ The Central Depository Bangladesh Limited (CDBL) established in 2000.

  10. Requisitions for getting license as a Stock Broker: No entity shall be eligible for getting license as a stock broker if- • It is not enlisted as a member of stock exchange. • It is a merchant banker, portfolio manager, trustee of mutual fund and Asset Management Company. • It is not a company or statutory agency and it’s paid up capital is less than 25 lakh. • Any member of its or its board of directors is involved in fraud and illegal activities. • He is identified according to statement of Credit information Bureau as a non payer of loaned money

  11. Establishing Branch office: A brokerage firm can open maximum 4 branches under one time authorization. Submission Requirements: • An application • Decisions of Board meeting • Photocopy of hire contract(Certified by member) • Name of the approved agent • Name of in-charge of branch office

  12. Who can’t open brokerage firm? The administrative officer and Manager of #SEC #DSE #CSE #Any person not permitted under penal code & bankruptcy act

  13. Trading Process: The trading process in brokerage house is technical. The base of the brokerage operation is done by Trading Software which establishes connection between brokers and stock exchanges. Developments in information & communication technologies (ICT) have enhanced the potentiality of ICT to the electronic trading systems.

  14. Broker Operation Trading Settlements 1) Instrument (Securities) Settlement 2) Monetary Settlement

  15. Trading in DSE The application, which runs in DSE for trading, is called TESA (Tandem Electronic Securities Architecture). TESA has two parts: • MSA (Member's Server Application) & • TWS (Trader workstation).

  16. Trading in CSE The CSE trading system: CHITTRA has four modules: 1. Broker's Workstation (BWS),2. Market Operations Systems (MOPS),3. Surveillance 4. VECTOR ( Versatile Engine for Trading and On-Line Reporting)

  17. Position of Brokerage House in Structure of Capital Market: • Regulatory Authority • Securities & Exchange Commission • Stock Exchange • *Dhaka Stock Exchange Limited. • *Chittagong Stock Exchange • Central Depository Bangladesh Limited (CDBL) • Market Intermediaries: • Stock Brokers • Merchant Bankers • AMCs • CDBL

  18. Other operating activities of Brokerage House: • Providing Loan(charge 20%) • Underwriting • Managerial Consultancy • Maintaining efficiency, reliability and probity • Responsibility to clients • Providing correct information • Providing advice about Investment • Responsibility to commissions • Banning on involving illegal activities for own interest • Banning on creating Black market • Informing about suspicious activities

  19. Howla Charge: ●A charge made by DSE against purchase of sale of securities. ●It’s charged on per batch of buy and sale of securities on trade. ●In case of successful executed buy or sale of securities, A unique number of ID is labeled on that transaction called the Howla Number. At present Tk. 2 is charged against per howla. In CSE it’s called “Contract Charge” which is same as the DSE.

  20. Laga Charge: • A charge made by DSE against the purchase or sale of securities. It’s the commission charged by DSE. At present this charge is Tk. 0.002 per hundred taka trade of securities. • In CSE it’s called “Commission Charge”. Unlike DSE there are slab to claim this charge: • Trade Value ≤ 5core 0.0175% • Trade Value ≥5core≤10 crore 0.0150% • Trade Value ≥10 crore 0.0125%

  21. Market Control through TESA/VECTOR: 1. Session Control: Opening and closing the market via interactive control. 2. Validation Parameters: Setting and viewing parameters that control the trading engine validation e.g. tick size, Circuit Breaker, Circuit Filter, Market lot, Price protection Percentage. 3. Messaging: Allows the dissemination of company announcement data and general market administrative massages.

  22. Screen Based Trading System an advanced trading system over the “Cry out Market”. In this system the shares are dematerialized record client’s every transaction electronically

  23. Trading Sessions: There are five sessions of trading period: a)Pre-opening session b)Opening session c)Continuous or Regular trading session d)Closing session e)Post-closing session

  24. Types of transactions Price Volume Validity Limit order • Good till day • Partial fill • Market order • Partial fill and kill Good till date • Drip Feed Order • Full fill or kill Match at Closing Price Order Orders may be grouped or categorized based on the following:

  25. Problems in operating of brokerage firms Share market debacle Belated action by regulatory bodies Lack of investor’s confidence

  26. Thankyou

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