Executive Summery

The Bangladesh Securities and Exchange Commission (BSEC) is the regulator of the capital
market of Bangladesh, comprising Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange
(CSE). The Commission is a statutory body and attached to the Ministry of Finance. Dhaka Stock
Exchange combined market capitalization of listed companies on Dhaka bourse stood over $40
billion. Chittagong Stock Exchange combined market capitalization of US$30 billion as of 2013.
Basically stock exchange is a trading system through which capital markets are controlled,
monitored, operated. People buy, sell shares from shareholders and this organization monitors
and controls situation of share market.

History of Bangladesh Stock and Exchange Commission (BSEC)

BSEC was established on 8 June 1993 under the Securities and Exchange Commission Act, 1993.
The Chairman and Members of the Commission are appointed by the government and have
overall responsibility to administer securities legislation. The commission, at present, has three
full-time members, excluding the Chairman. The Commission is a statutory body and attached
to the Ministry of Finance.

Initially named simply as the Securities and Exchange Commission, on 10 December 2012,its
name was officially changed to the Bangladesh Securities and Exchange Commission.

During the 2011 Bangladesh share market scam the BSEC withdrawing various directives given
earlier to help stabilize trading at the Dhaka Stock Exchange and was criticized by some
commentators for its actions during the subsequent crash.

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Functions of BSEC

1. Regulating the business of the stock exchanges or any other securities market.
2. Registering and regulating the business of stock-brokers, sub-brokers, share transfer
agents, merchant bankers and managers of issues, trustee of trust deeds, registrar of an
issue, underwriters, portfolio managers, investment advisers and other intermediaries in
the securities market.
3. Registering monitoring and regulating of collective investment scheme including all
forms of mutual funds.
4. Prohibiting fraudulent and unfair trade practices relating to securities trading in any
securities market.
5. Prohibiting insider trading in securities.
6. Undertaking investigation and inspection, inquiries and audit of any issuer or dealer of
securities, the stock exchanges and intermediaries and any self-regulatory organization
in the securities market.
7. Conducting research and publishing information.

Contribution of BSEC

Capital market is the source of long term financing for the business and industries, way of
mobilizing savings to investment and provider of price discovery and liquidity generation
through organized stock exchanges. While the primary market directly provides financing to the
business and industries, the secondary market keeps continuation of price discovery and
liquidity generation for the investors keeping the whole system active. But investors should
take investment decision based on proper knowledge, judgment and risk tolerance. Bangladesh
Securities and Exchange Commission is continuing its efforts to develop a more enabled capital
market in Bangladesh where investors, businesses and industries, government and all market
participants may find it more worthy, and can contribute more significantly to the development
of national economy.

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History of Dhaka Stock Exchange (DSE)

First incorporated as East Pakistan Stock Exchange Association Ltd on 28 April 1954 and started
formal trading in 1956. It was renamed as East Pakistan Stock Exchange Ltd on 23 June
1962.Again renamed as Dacca Stock Exchange Ltd on 13 May 1964. After the liberation war in
1971 the trading was discontinued for five years. In 1976 trading restarted in Bangladesh, on 16
September 1986 DSE was started. The formula for calculating DSE all share price index was
changed according to IFC on 1 November 1993. The automated trading was initiated on 10
August 1998 and started on 1 January 2001. A Central Securities Depository System was
initiated on 24 January 2004.

As of 16 November 2009, the benchmark index of the Dhaka Stock Exchange (DSE) crossed
4000 points for the first time, setting another new high at 4148 points. In 2010, the index
crossed 8500 points and finally crashed in the first quarter of 2011. Millions of investors lost
their money and came out onto the street blaming the speculators and regulators for the
bubble that finally burst in what became known as the 2011 Bangladesh share market scam.
Currently there are total 22 industrial sectors in DSE which accommodates 553 listed
companies.

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Function of Dhaka Stock Exchange (DSE)

1. Listing of companies. ( as per Listing Regulations)

Contribution of DSE

The Dhaka Stock Exchange has been playing a vital role in the economy of Bangladesh by
diversifying the stock and bond to the investor, capital market. DSE is the one of the most
important financial institutions in this country. Bangladesh capital market has passed 2009
more successfully with many new records and making significant contribution to national
economy. Capital market today is not merely a place of securities trading rather it has emerged
as time bound role, in a catalyst form, player in the overall economy.

Market capitalization has increased from 1 Lakh 4 thousand 379 crore 90 lakh 20 thousand and
Tk 2 lakh 16 thousand 752 crore 67 lakh 8 thouand and 225 registering 107.66 per cent growth.
Market capitalization to GDP has increased from 19.26 per cent to 35.25 per cent.

DSE General index has increased from 2795.34 points to 5312.44 points showing 2 thousand
517.10 points up. Highest single day turnover touched the milestone of Tk. 1503.56 corer on 25
January 2010.

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Trading system of DSE in Bangladesh

The stock market is one kind of capital market where the stocks are of the different companies
are traded. DSE, floor trading was started with open cry-out auction system. Now trading has
become automated, led by the DSE through the central depository. In the present automated
trading environment, bids/offers, depth, and required broker particulars are all recorded and
can be retrieved for future reference.

There are two types of stock markets such as—

1. Primary market
2. Secondary market

The secondary market is structured to provide liquidity and marketability to the security
industry. It’s a market where people can buy and sell stocks.

Fundamental Analysis and Technical Analysis are important for secondary market.

DSE is playing a vital role in stock markets and significantly contributing towards the national
growth of Bangladesh. By trading stocks and shares, it is significantly contributing on the
economical growth of our country.

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History of Chittagong Stock Exchange (CSE)

Four decades after establishment of Dhaka Stock Exchange, Chittagong Stock Exchange started
its operation from 10 October 1995, with an open outcry auction system. In the backdrop of a
strong need to institute a dynamic automated and a transparent stock exchange in the country,
seventy reputed business personalities established the CSE in the commercial capital of
Chittagong. Only 30 securities were listed on the first day trading when market capitalization
stood at US$0.2 Billion. Now CSE is a completely automated exchange with a screen based
trading facility on a countrywide communication network. The exchange comprised of twelve
board members, presided by Mr. Amir Khosru Mahmud Chowdhury and run by an independent
secretariat from the very first day of its inception.

CSE was formally opened by then Hon’ble Prime Minister of Bangladesh on November 4, 1995.

Function of CSE

1. Listing of companies.
2. Settlement of trading.
3. Market administration and control.
4. Market surveillance.
5. Publication of monthly review.
6. Investors grievance cell.
7. Increase business turnover.
8. Modernize trading system.
9. Contribute to capital market policy development.
10. Ensure exchange related quality services.
11. Ensure effective relationship management.
12. Engage in product and market diversification.
13. Value for people.

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Contribution of CSE

The Chittagong Stock Exchange has been playing a vital role in the economy of Bangladesh by
diversifying the stock and bond to the investor, capital market. CSE is the one of the most
important financial institutions in this country. It is giving an overall indication of the main
characteristics of listing regime. CSE grants access to public limited companies to list in the
exchange, thus providing its securities a securities trading facility. CSE also initiated internet
trading service. At initial listing companies, CSE make sure of exacting compliance of listing rules
and regulations by the listed companies to provide an efficient and transparent market of
international standard. Capital market today is not merely a place of securities trading rather it
has emerged as time bound role, in a catalyst form, player in the overall economy.

Trading system of CSE in Bangladesh

Chittagong Stock Exchange was the first stock exchange in the country to introduce automated
trading system on June 1998. The trading system at CSE was known as CHITTRA at that time. It
connected major cities of Bangladesh. CHITTRA provided a screen based, quote driven trading
facility. CHITTRA automatically matched the best prices. Millennium Exchange and go TX
systems on October 20, 2011 Chittagong Stock Exchange launched its much awaited Next
Generation Trading System (NGTS). The system is highly scalable and can scale up to even
higher order and contract rates. Millennium Surveillance Module supports Real time and offline
analysis and pattern configuration. It can generate Effortless market replay, Comprehensive
case management. It has powerful reporting capabilities, Enhanced relationship detection,
Flexible and Powerful charting and Compliance capability.

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