BB unveils guidelines for G-Sec transactions

The Bangladesh Bank (BB) has published a set of guidelines for the transaction of the government securities (G-Sec) listed on the capital market.

According to the guidelines released on Tuesday, government securities will be viewed on the central bank’s electronic trading platforms, and also on the trading platforms of the DSE and the CSE.

The transactions of treasury bonds, treasury bills, or any other government securities will be operated as per the newly issued per guidelines.

The Bangladesh Bank, as per the new guidelines, will maintain records of all subsidiary general ledger (SGL) and investment portfolio securities (IPS) accounts through the electronic system, which will act as a depository of government securities.

These securities will be traded over-the-counter (OTC) and government securities order matching (GSOM).

In OTC, the trade will be executed by the negotiation between member dealers or MDs (for its own trade and on behalf of its clients) outside the trading platform.

The central bank’s GSOM will provide users access to trade in the secondary market in real-time.

Transactions (both in OTC and GSOM) will be done following the Delivery versus Payment (DvP) process for settlement. DvP settlement model implies that the movement of securities occurs only after the successful transfer of funds from the buyer to the seller.

The business partner ID (BPID) holders who intend to trade on the DSE or CSE platforms, will require to fill in the relevant transfer forms and submit it to the member dealer (MD) along with beneficiary owner identification (BOID) acknowledgement copy to block/earmark partial or entire portion of their holding of G-Sec in the Market Infrastructure Module (MI module) through the Financial Market Infrastructure (FMI) system.

Settlement of the fund of G-Sec trading will take place as per existing process of exchange clearing, according to the guideline.

The trading of government securities (G-Sec) commenced on the Dhaka Stock Exchange (DSE) on 22 October last year.