Slide 1

Are you able to engage in purchasing and selling share in the stock exchange ?WELCOME TO OUR PRESENTATIONGROUPDDEPARTMENT OF ACCOUNTING & INFORMATION SYSTEMSUNIVERSITY OF DHAKA

GROUP MEMBERSName ID No.Md. Kamal Pasha 16111Aninda Ghosh 16096S.M.N Jamiul Hikma (Sajib) 16103Md. Rafiqul Islam (Hiron) 16094Md. Monirul Islam (Monir) 16109S.M. Rakibul Islam (Sourav) 16100Al-Imranul Alam (Rabbi) 16183Md. Robiul Islam 16121S.M. Moshiur Rahman (Rohan) 16184S.M. Ibne Sad (Anik) 16118 OUR PRESENTATION TOPICOPERATIONS OF BROKERAGE HOUSEDEFINITION OF BROKER A person or firm that conducts transactions on behalf of a client. Brokers derive their profit from commissions on orders given.Types of Brokers

Bill and note brokerCommercial or merchandise brokerInsurance brokerReal estate brokersMatchmakers(marriage brokers)Stockbrokers

INTRODUCTION TO BROKERAGE HOUSE Abrokerage house, also called abrokerage firm, is a company licensed to buy and sell stocks or securities on behalf of investors.SharesBuySellPublicly listed CompanyStock ExchangeInvestorsBrokerage HouseHistory 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.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 its 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 moneyEstablishing Branch office:A brokerage firm can open maximum 4 branches under one time authorization.Submission Requirements:An application Decisions of Board meetingPhotocopy of hire contract(Certified by member)Name of the approved agent Name of in-charge of branch office

Who cant open brokerage firm?The administrative officer and Manager of# SEC# DSE# CSE# Any person not permitted under penal code & bankruptcy actTrading 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. Broker OperationTradingSettlements 1) Instrument (Securities) Settlement 2) Monetary Settlement

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). 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)

Position of Brokerage House in Structure of Capital Market:Central Depository Bangladesh Limited (CDBL)Stock Exchange*Dhaka Stock Exchange Limited.*Chittagong Stock Exchange Market Intermediaries:Stock Brokers Merchant Bankers AMCs CDBL

Regulatory AuthoritySecurities & Exchange CommissionOther operating activities of Brokerage House: Providing Loan(charge 20%) Underwriting Managerial ConsultancyMaintaining efficiency, reliability and probityResponsibility to clientsProviding correct information Providing advice about InvestmentResponsibility to commissionsBanning on involving illegal activities for own interestBanning on creating Black marketInforming about suspicious activities

Howla Charge:

A charge made by DSE against purchase of sale of securities. Its 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 its called Contract Charge which is same as the DSE.

Laga Charge:

A charge made by DSE against the purchase or sale of securities. Its the commission charged by DSE. At present this charge is Tk. 0.002 per hundred taka trade of securities.In CSE its called Commission Charge. Unlike DSE there are slab to claim this charge:Trade Value 5core 0.0175%Trade Value 5core10 crore 0.0150%Trade Value 10 crore 0.0125%

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.

Screen Based Trading System an advanced trading system over the Cry out Market. In this system the shares are dematerialized record clients every transaction electronicallyTrading 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

Types of transactionsOrders may be grouped or categorized based on the following:OrderPriceVolumeValidityGood till dateGood till day Full fill or kill Partial fill and kill Partial fill Match at Closing Price OrderDrip Feed OrderMarket order Limit orderProblems in operating of brokerage firmsShare market debacleBelated action by regulatory bodiesLack of investors confidenceThank you