Bangladesh Securities and Exchange Commission (BSEC) has taken a new initiative to ensure the safety of investors’ money in the capital market. Under this initiative, a ‘Uniform Online Platform’ will be created, through which brokerage houses will provide information related to their Consolidated Customer Account (CCA) to the stock exchange every day.
Dhaka and Chittagong Stock Exchanges have already been instructed to create this platform and they have started working on it. In the new system, brokerage houses will collect their CCA account information and provide it to the stock exchange, from where this information will be verified and any discrepancies or irregularities detected will be corrected. As a result, the risk of investors losing money or shares will be reduced.
BSEC Executive Director Mohammad Rezaul Karim said that if this initiative is implemented, the incidents of embezzlement of money or securities from brokerage houses will be reduced. He further said that this will increase supervision and monitoring in the capital market, through which the interests of investors will be protected.
However, there are doubts about the implementation of this initiative among some individuals and institutions related to the capital market. DSE Brokers Association (DBA) President Saiful Islam said, ‘In the current context of the country’s capital market, implementing this initiative is not easy. It requires the necessary technical preparation and sufficient manpower and time to operate the platform.’ He warned that if cooperation is not obtained from all parties, then this plan cannot be successful.
Saiful Islam further added, ‘To implement this process, cooperation of stakeholders related to the capital market, including the central bank, as well as the BSEC, is very important. The effectiveness of the platform must be ensured, so that the risk of losing money and shares from the CCA is reduced.’
Although the new initiative of the BSEC is appreciated, extensive preparation and coordination will be required to implement it. Those concerned hope that if it can be done properly and in a coordinated manner, it can play an effective role in protecting investors’ capital.
The Bangladesh Securities and Exchange Commission (BSEC) sent a letter to the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) on October 31, asking them to inform about the progress of creating a uniform online platform. According to the letter, a meeting was held with the DSE and CSE on April 29, 2023, regarding the launch of the uniform online platform. After this meeting, the BSEC directed the DSE and CSE to create the platform on October 9. Later, in view of the application of the stock exchanges, the BSEC gave an additional 20 working days (till November 6). The BSEC has now asked the stock exchanges to inform about the current status of creating a uniform online platform.
What to do
The two stock exchanges have been instructed to create a uniform online platform, stating that the current method of calculating CCA (Combined Customer Account) for the stock exchanges should be reviewed and a standardized format should be developed. This format should be submitted to the commission and published on the websites of the exchanges.
On the new platform, stock brokers will update their CCA information after the end of daily transactions. DSE and CSE will regularly review this information and take necessary action if any inconsistencies are found.
At what stage of progress
Meanwhile, DSE and CSE sources said that the work of creating a uniform online platform has started. DSE has already formed a committee and plans to submit a report to BSEC soon.
DSE Acting Managing Director (MD) AGM Satwik Ahmed Shah said that a team consisting of Bangladesh Bank, CDBL, CCBL and broker houses is working to create the platform. Their research is still ongoing. The report will be submitted to BSEC soon.
Implementation Challenges
Creating an integrated online platform in the existing reality is very challenging. A member of the DSE said that it is almost impossible to combine the information from the back office software of about 900 brokerage houses with the settlement information of Bangladesh Bank.
DSE Director Minhaj Mannan Emon and CSE Managing Director M Saifur Rahman Majumder described the initiative as difficult and time-consuming. Because the market is not technologically prepared.
Meanwhile, Treasury Securities official Mostafa Mahbub Ullah proposed that arrangements should be made to directly settle by linking the brokerage house software with the investor’s bank account. This will reduce the pressure on the stock exchange.
