Trial trading of government securities to begin Monday

The trading of government securities (G-Sec) will start on a trial basis on Monday next.

These securities would be traded on the trading floor of the Dhaka Stock Exchange (DSE), the country’s premier bourse, said a Bangladesh Securities and Exchange Commission (BSEC) announcement.

Currently, there are 221 treasury bonds with tenures ranging from 5 to 20 years listed on the DSE. Government securities are now being traded among institutional investors, including banks and financial institutions.

On October 3, Bangladesh Bank Governor Abdur Rouf Talukder told the trading of the treasury bonds would start next week.

The Dhaka Stock Exchange and the Chittagong Stock Exchange also carried mock trading of treasury bonds.

On October 14, last year, the DSE conducted the first mock trading of treasury bonds in 16 years using its trading system.

The DSE officially launched treasury bond-bill secondary trading in the early 2000s, but not a single trade took place after the first day due to the then inefficient trading cost structure and inconvenient trade settlement system between the money market and the capital market.

The BSEC, the DSE, and the Bangladesh Bank in 2019 entered into a tripartite agreement where the DSE agreed to waive all listing fees for government bonds and have a rational tax structure from the government.

The DSE then agreed to charge a feasible amount for the trading and settlement of the government bonds.

While the central bank agreed to allow data exchange with the bourse and the Central Depository Bangladesh Ltd (CDBL) to let treasury bonds trade on the stock exchanges’ debt platform.

Earlier on September 29 this year, the BSEC published a guideline on the trading system of government treasury bonds (T-bond) or government securities (G-Sec) on the secondary market at the stock exchanges.

The Dhaka and Chittagong stock exchanges would ensure trading platforms for the trading of government securities on the stock exchange by any individual and institutional investor, including non-resident Bangladeshis (NRBs) and foreign investors, as per the order.

The stock exchanges would also ensure the continuous listing of government securities and the de-listing, and such processes would be treated as those done under the provisions of the Securities and Exchange Ordinance 1969, the BSEC guideline read.