Home ›› 30 Sep 2022 ›› Front
The Bangladesh Securities and Exchange Commission (BSEC) on Thursday published a guideline on the trading of government treasury bonds (T-bond) or government securities (G-Sec) on the secondary market at the stock exchanges.
The stock market regulator chairman, Prof Shibli Rubayat Ul Islam, signed the directive in this regard and sent it to the stock exchanges and the Central Depository Bangladesh Ltd (CDBL) authorities on Thursday.
Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) will ensure the facility of a trading platform for the trading of government securities in the stock exchange by any individual and institutional investor, including non-resident Bangladeshis (NRBs) and foreign investors, as per the order.
The stock exchanges will also ensure the continuous listing of government securities and the de-listing of government securities at maturity, and such listing or delisting of government securities will be treated as those done under the provisions of the Securities and Exchange Ordinance 1969, it also said.
The trading, clearing, and settlement of G-Sec will be based on a mutual agreement. The stock exchanges will be entrusted with the clearing and settlement of G-Sec trading until the separate Clearing and Settlement Company, i.e., Central Counterparty Bangladesh Limited (CCBL), starts its operation, the BSEC said.
Under the provisions of the Depositary Act, all outstanding eligible G-Sec that is to be issued pursuant to the mutual agreement must be registered with the Depository.
The CDBL will act as the gateway between the Bangladesh Bank and the stock exchange as per the Mutual Agreement, the order said.
Its trade events will remain the same as the main board of the stock exchange – 2% (+/-) on the respective G-Sec or T-bond reference price as provided by the Bangladesh Bank prior to the start of trading for the day.
The T+2 settlement cycle shall be followed for “A category” securities of the stock exchange.
Its registration, listing and annual listing fees have been waived in the order.
All existing G-Sec or treasury bonds listed with the stock exchange before the mutual agreement will be delisted before the start of G-Sec trading at the stock exchange platform.
The guidelines said that every G-Sec at its maturity will be automatically delisted by the stock exchange. Any G-Sec that is eliminated before its maturity by the Bangladesh Bank will also be delisted by the stock exchange.
It stated that information about such elimination before maturity will be disseminated in the trading monitor as soon as it is received from the Bangladesh Bank.
G-Sec trading (pay-in of G-Sec or deposit of funds by the buyer) will take place on the trading day (i.e. on a T+0 basis), while G-Sec settlement (pay-out of G-Sec or fund transfer to the seller) will take place on a T+2 basis.
The BSEC ordered that any off-market transaction of G-Sec with consideration or without consideration be settled outside the stock exchange as per the respective regulations of DSE and CSE.
Each stock broker will avail an additional Tk 2 crore as a non-margin limit above the non-margin limit fixed under the Stock Exchanges regulations for G-Sec trading only and any transaction of G-Sec above the limit is marginable under the respective regulations of the DSE and CSE.
Trading of all listed T-bonds will begin on the stock exchanges very soon.
On August 23, the BSEC in a letter informed the ‘go-live’ date to the finance ministry. The bourses would complete mock trading successfully and then finish system production within September 3.
The Bangladesh Bank, DSE, CSE, and CDBL will take the necessary measures to go live formally on September 4.
The Bangladesh Bank, the BSEC, the Dhaka Stock Exchange, the Chittagong Stock Exchange, and the Central Depository of Bangladesh signed a memorandum of understanding regarding the matter earlier.
There are now 221 treasury bonds with a tenure ranging from 5-20 years listed on the DSE. Government bonds are traded between institutional shareholders, including banks and financial institutions.
