Operation of DSE And The Activities of SES Company Limited

How to Invest in DSE

Let us look at the procedures that have to be followed by an average investor if s/he wants to invest in the DSE. There are several steps s/he has to go through. The first thing s/he has to do is to open an account with a brokers house. This enables the investor to give buy or sell orders through the broker, since only brokers are legally able to trade securities in the stock exchange.

In order to open an account, the investor would have to contact with the securities firm that are in DSE, specifically with members of DSE. The investor will be given an application form from the brokerage firm for opening the new account. This form includes the picture of the investor/s, names, mailing address, contact numbers and other necessary inquiries. There are certain requirements that have to fulfilled beforehand, that include: Submit two photographs of the applicant. To be introduced by a person who is already trading with that particular brokerage house. To provide a bank accounts number. To deposit a minimum amount of money which is refundable. These steps are taken to provide proof of identification. The brokerage houses charges for membership and they provide forms of membership. The charges vary from one house to another. The forms includes Applicant registration form, BO account opening form, BO account nomination form, Central Depository Bangladesh (CDBL) form, Application for web user registration form, Power of attorney form & Pay in transfer form. The different types of forms are discussed below.

Applicant registration form This gives the bank details of the investors, detail of the nominees, details of authorized person for transaction of all kinds, details of the introducer. This form actually reveals the information about the investor and the broker. BO account opening form This form gives name of CDBL participants with their CDBL participant. There will be BO ID number. In this form investors detail will be disclosed.

BO account nomination form This form is mainly filled up, as the investor needs to nominate someone all his or her investments in case s/he dies. So that the brokers or the companies know which person will get the right of the shares of the dead person. Central Depository Bangladesh (CDBL) form This form gives the investor the BO ID number and the client code. Application for web user registration form This form includes the BO ID number and the client code and here the applicant undersign as a registered client of a particular broker of Dhaka/Chittagong Stock Exchange Ltd. and provides the facility to use the web services. Power of attorney form This form gives the power of attorney to the broker to handle the transactions of the investors. Pay in transfer form It includes the details information of transferor and transferee.

In order to trade securities in the DSE, order slips are given. Buy order slip: Through this slip investor can tell the broker which companies shares to buy. In addition, how many shares s/he want to buy and what rate the investor is agreeable to buy. Sale order slip: By this slip investor can tell the broker which companies shares to sell from his account, number of shares to sell and what rate the investor in willing to sell.

All the forms come with rules and regulations that are mentioned on the back of the forms. These forms follow all the regulations set by the DSE and SEC. After filling out the forms and going through all other formalities, the client successfully gets registered and is then able to invest through that broker. However, the client is not limited to become registered with only one member. If he/she chooses, he/she can become clients of a few members, unless objected by the SEC. As soon as the client is registered, he/she becomes an investor in DSE. 3

Trading in DSE First, the investors contacts the broker, and then gives him/her written permission to buy certain number of securities of a certain corporation(s) at a certain price(s) (also known as bid prices). The member has all the required buying listed on a form. As soon as trading begins, the member/broker lists the demand onto the Tandem Electronic Securities Architecture (TESA), the online trading system of DSE, and continuously searches for meeting the requirements of the investors. If the member finds that someone else, either a client of this member or from any other member, is selling the required securities of the mentioned corporation at a price equal to the bid price, then he immediately buys that number of securities as ordered for the investor.

The same procedure goes while selling. The investors notify the member/broker regarding which securities they are willing to sell and at which prices (which is known as ask prices). The member/broker lists the information onto the TESA system. When another or the same member finds that the ask price and securities of the corporation are the same for some other investors requirement to buy, the investor who can be a client of any member, then the member whose client is buying will buy the securities immediately. Hence the desired securities are sold.

In case there are few investors either buying or selling same securities at the same price from an individual member, the investor who ordered or was listed on the TESA first is prioritized first. All these transactions are done online and at the end of the day TESA clearly shows a record of which member owes how much money to which other member. The buying investors provide the money as soon as they are buying. However, all accounts must be cleared within the settlement period for successful trades.

The member charges a commission for his/her services. This range varies from member to member, but is usually quite the same among all. For instance, for lower market value of trade, the member usually charges high percentage as otherwise it does not seem much profitable. Then on the other hand, for large values of trades, the member charges lower percentage commission, thus allowing investors economies of scale as well as persuade members to trade is larger values. The members charge commissions every time securities are bought or sold through them.

How the Market Functions The stock exchange is a market for existing securities, or the shares and debentures issued by the company and the securities issued by the government. It is a market where people wishing to dispose of shares can find a buyer and people wishing to buy shares can find a seller.

The role of a stock exchange in a nations economy is: It provides a market where stocks and bonds can be sold immediately. This makes people more willing to buy shares, as they know their shares can be converted to cash whenever they need it. Movements in the share prices act as an indicator to the efficiency and profitability of the firms and industries. The prices in the stock exchange act as a means of valuing wealth held in the forms of securities. This is important for the assessment of compensation payments when firms are nationalized. Stock exchange contributes to the industrialization of a country. By giving confidence to the people, it enables a company to raise the much-needed capital for expansion purpose. It also indicates the performance of the country.

The factors which influence share prices are: The recent profit record of the company and its recent rates of dividend and when the company is about to declare a bonus. The growth prospects of the industry in which the company operates. The economic policy of the government changes in various economic policies have important effects on peoples willingness to buy and sell. Rumors and announcements of mergers and takeover bids since take over bids usually offer generous terms to the shareholders, the demand for the companys shares usually increases. The state of management labor relations industrial unrest and frequent strikes tend to lower share prices. Foreign political developments this maybe important if the economy is dependent on world trade.

Changes in the rate of interest on government securities this affects share prices as increase in the interest rate may cause people to sell shares and buy government securities. News of new discoveries this can cause a major boom in the companys share prices. The view of experts the view of financial writers can often influence people to buy or sell shares. When a company is about to announce the development of a new product.

In Bangladesh stock market is highly sensitive to the information. Information gets available to few people before it is disclosed to the general public, which causes few people to benefit from it. Some times the investors expectation causes the price of a particular companys share to rise abnormally. For example recently the share price of Trust Bank increased to a very high level even though many other banks performance were better. Hence ours stock market is an inefficient one which does not always reflect the true picture of the economy.

A Brief History of the Dhaka Stock Exchange (DSE) In Bangladesh, we have two Stock Exchanges in Dhaka and Chittagong. The following type of instruments is traded at Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE): (a) Equity Shares (b) Debentures (c) Mutual Funds The Dhaka Stock Exchange (DSE) has 195 SEC registered trading members/brokers and the Chittagong Stock Exchange (CSE) has 124 registered brokers. Many of these registered brokers have authorized representatives operating on the floor on behalf of the concerned brokers of DSE or CSE. One should execute their deal through a registered broker of a recognized stock exchange or through a registered authorized representative.

Incorporated as East Pakistan Stock Exchange Association Ltd. : 28th April 1954 Start of Formal Trading : 1956 Renamed as East Pakistan Stock Exchange Ltd. : 23rd June 1962 Renamed as Dacca Stock Exchange Ltd. : 13th May 1964 Trading Suspended under new State Policy : 16th December 1971 Trading Resumed in Bangladesh : 16 August 1976 Starting Of All Share price Index calculation : 16th September 1986 6

Share price Indices calculation on basis of IFC Designed formula : 1st November 1993 Starting of Automated trading : 10th August 1998 Starting Of DSE-20 Index calculation : January 2001 Starting Of DSE General Index calculation : 27th November 2001 Start of CDS through CDBL : 24th January 2004

TESA operations TESA is a Trader Software Application. It is the software by which the buying and selling of shares take place in Dhaka Stock Exchange (DSE).

When the TESA is opened, the main window appears which is a spreadsheet consisting of several columns and rows. On the upper portion of the window there is a purple row that continuously shows the last trading price of all the listed public companies of Dhaka Stock Exchange.

The columns are as follows: INSTRUMENT SESSION BUY SELL LAST TRADE TOTAL TRADE PRICES TOTAL PRICES STATISTICS DEVIATION

INSTRUMENT: Instrument consists of CODE and BASES. CODE indicates the particular companys name and BASES indicates the type of company.

SESSION: Under Session column we have CTNG that indicates the share of that company is taking place continuously.

BUY: Under Buy, we have BOS, MO, QUANTITY, and PRICE.

SELL: Under Sell column, we have PRICE, QUANTITY, MO and BOS.

LAST TRADE: We have PRICE, QUANTITY under this column.

TOTAL TRADE: This column contains VALUE, QUANTITY (000s), and NO.

PRICES: Prices include OPEN, CLOSE, YCP.

STATISTICS: It includes HIGH and LOW.

DEVIATION: It includes YCP, OPEN.

3. There are different colors displayed on the digit of individual column. These are as follows:

GREEN: The stock price has gone up relative to previous days closing price.

RED: The stock price has gone down compared to previous days prices.

BLACK: The price is unchanged.

4.

At the very left there is a separate column, which shows the following:

Current Date and Time DSE INDEX: There are two types of index. DSE General Index DSE 20 Index GAINERS & LOSERS. GREEN COLOR indicates the number of gainers and RED COLOR indicates the number of losers. Market Depth When an individual has taken a decision to buy or sell a particular companys stock he has to activate Market Depth Table. This table shows the average of buying/selling offer or the buy depth. In that table he has to input the companys quoted name and press enter. Then all the related data related to that company would appear on the screen. The day statistics will also be shown on the left side of that window.

The statistics includes the followings:

Turnover Quantity No. Of Trades High Low At the right side of the window there are two columns: Buy and Sell price show the stocks current buying and selling price. Into the both cell there are three columns they are Total Qty, DVP Qty, Price. In the buy and sell column all available market order is shown.

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Types of Markets

There shall be the following four markets in the system, namely:

(a) Public Market - Matching in this market is automatic based on the touchline prices, which follows normal settlement procedure.

(b)Spot Market - Matching in this market is also automatic, settlement of which follows procedure for spot transactions. The Management Team may put an instrument on compulsory spot to curb volatility in prices of the instrument.

(c) Block Market - This is the market for bulk selling and buying on automatic matching with equal quantity and best price (all or none condition) basis. Orders entered in this market are immediately flashed on all trading workstations. The minimum amount for a bid of bulk lot for a certain security shall be Tk. 0.5 (point five) million at market price unless otherwise fixed by the Council from time to time with the approval of the SEC.

(d) Odd lot Market - Odd lot shares are traded in this market on automatic matching with equal quantity and best price (all or none condition) basis.

Types of transactions- Orders may be grouped or categorized based on the following, namely:(a) Price; (b) Volume; and (c) Validity.

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SHARE CATEGORIZATION: A, B, G AND Z

A-Category Companies

Companies, which are regular in holding the current annual general meetings and have declared dividend at the rate of ten percent or more in the English calendar year. B-Category companies

Companies, which are regular in holding the current annual general meetings but have failed to declare dividend at least at the rate of 10% of more in the English calendar year.

Z-Category companies

companies which have failed to hold the current annual general meeting or has failed to declare any dividend or which are not in operation continuously for more than six months or who accumulated loss after adjustment of revenue reserve, if any is negative and exceeded its paid up capital.

G-Category companies

Greenfields companies: the lone company, which is placed in this, group I s Lafarge Surma Cement.

The Clearing and Settlement module The Clearing and Settlement module provides the management of trade from the point of entry into the Settlement Pool trade database until it has been delivered and settled and removed from the Settlement Pool. It consists of three major business processes.

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Clearing: Participant trade reporting and affirmation, billing, assigning settlement instructions. Settlement: The process of overseeing that delivery of all instruments to the buyer and payment of all moneys to the seller has occurred before removing the trade from the settlement pool. In our Clearing and Settlement System, new netting system was being followed from 2nd July 2000. A Group: Number of Instruments are 131 (112 + 08D + 11M) , Here D for Debentures & M for Mutual funds (Trading in Public Market with trade for trade settlement facility for scrip only through DSE Clearing House on T+2, T+4 basis)

The above cycle is valid for A ,B & G category instruments B Group: Number of Instruments are 39 (Trading in Public Market with trade for trade settlement facility through DSE Clearing House on T+2, T+4 basis) G Group: Number of Instrument is 1 (Trading in Public Market with settlement facility through DSE Clearing House on T+2, T+4 basis) trade for trade

Z Group: Number of Instruments are 96 (Trading in Public Market with trade for trade settlement facility through DSE Clearing House on T+4, T+7 basis). "Z Group" is marked in BASES columns in our TESA Trading Software.

This cycle is valid only for Z group instruments

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WHAT IS DEMATING SHARE?

All selling shares have to transfer (Pay in) to the clearing account of selling Brokers from concerned BO account within settlement period. Regarding the cash payment the procedure will remain unchanged as mentioned above

Trading Sessions TESA conducts trading in-5-phases. Enquiry: In this session Brokers can logon to the system. No order will be submitted in this session. No trade will be executed. Only previous orders can be withdrawn in this session Opening: The Opening is a pure, single-price auction. All buy and all sell orders are compared and calculate the open-adjust price. No trades will be executed in this session Continuous Trading: During this phase, participants enter orders and immediate execution or for inclusion in the book. Automatic matching and execution takes place based on best price/ first in, first out trading rules Closing: Closing prices are calculated and disseminated to market participants Post Closing: In this session all trades will be executed only closing prices Enquiry: Market will be closed in this session & other facilities like the previous enquiry session How Brokers and Agents Make their Profit A broker is a representative of an investor who is the intermediary of buying and selling shares, debentures and stocks. They work under the authorized agent of stock exchange. Their main source of income is the commission what they get from their agent. And an agent generates money through Laga and Hawla, which they collect from the Stock Exchange after each day. CDBL (Central Depository Bangladesh Limited) Central Depository Bangladesh Limited (CDBL) was incorporated as a public limited company on 20th August 2000 to operate and maintain the Central Depository System (CDS) of Electronic Book Entry, recording and maintaining securities, accounts and registering transfer of securities; changing the ownership without any physical movement or

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endorsement of certificates and execution of transfer instruments, as well as various other investor services including providing a platform for the secondary market trading of Treasury Bills and Government Bonds issued by the Bangladesh Bank. CDBL went live with the Electronic Treasury Bills Registry of Bangladesh Bank on 20th October, 2003. CDBL started Equity Market operations on 24th January, 2004 with one pilot stock. CDS system: Buying/selling through Stock Brokerage house and another way is stock trading, which is done by individuals. The brokerage system is controlled by CDS system. From this they look at the current stock price of any companys share and the buy/sell price given by the people who trade shares through brokerage houses.

The buy/sell order form is where people will give their name and the member number they have given by brokerage house. Then they place the name of the company, the number of shares and how much price they r asking for selling or what price they r willing to buy shares. If anybodys demand for share price meet the sell price then the main trading occurs.

After the trading, individuals receive money 2/3 days later. This is written in CDBL system as T + 1, 2, 3.

Under the CDS system there are about 50-55 enlisted companies. Most of them are a class companies and they are from different groups. There are almost 285 enlisted companies in DSE and out of the number, below 30% are under DSE system and used by breakage house. How Margin Trading Takes Place With the help of margin trading an investor can borrow cash from the broker and use it to invest in the stock exchange. How much an investor borrows depends on two things: 1) the amount which I am willing to borrow and, 2) the amount which the broker is willing to let me borrow. In margin trading a certain amount of cash has to be deposited in the beginning, before buying the shares. This is called Initial Margin Requirement. That means let say the total value of the shares we want to buy is Tk. 60,000 and we have a 50% Initial Margin Requirement, we will have to deposit Tk. 30,000, with the broker before we can go into any sort of transaction. An investor can magnify his rate of return through margin trading, however, in case there is a loss, the amount of loss which we will incur will also be higher than what would have normally happened. An investor also maybe required to maintain a certain level of equity to the total investment. This is called Maintenance Margin Requirement. For example we have a Maintenance Margin Requirement of 40%. That means at any point in time the value of our equity as a percentage of our total investment must be at a 40% level. If the value drops below this then the investor receives a Margin Call from the broker. If the investor fails to respond to this 15

margin call, that is, to bring back the equity to the required level, then the broker has the option to sell off the shares. There are various ways in which we can respond to Margin calls. One is to deposit cash, by doing so we can raise the level of equity. Secondly, we can deposit cash and use this cash to repay part of our loan. As, Assets = Liabilities + Equity, by repaying our loan, which we have used in margin trading, we can decrease the amount of liabilities and hence once again raise the level of equity. Finally, we can sell some of our shares and use the cash we received from there to repay our loan. In this way we are reducing both our assets and our liabilities. So as a result the equity as a portion of the total investment increases.

In Dhaka Stock Exchange there are various rules and regulations regarding margin trading. These are:

(1) A member may extend credit facilities to his approved client for securities transactions subject to the margin account requirements of these rules.

(2) Margin account arrangements must be evidenced in the form of a written agreement executed between the member and the client.

(3) A client who operates a margin account with a member shall authorize the member to mortgage, pledge or hypothecate the client's securities or property for a sum not exceeding the debit balance in the margin account and without obligation to retain in his possession or control securities of like character.

(4) The margin deposited by client with the member shall be in the form of cash, securities issued by the Government or its agencies, marginable securities and such other instruments as the Commission may from time to time prescribe. The initial margin must be deposited with the member not later than seven days from the first date of securities transaction and shall be such amount that would result in the equity being not less than 150% of the debit balance in the margin account.

(5) Whenever the equity in a client's margin account falls below 150% of the debit balance, the member shall request the client to provide additional margin to bring the equity to not less than 150%. Such additional margin must be satisfied by deposit of cash or marginable securities within three days from date of notice. The member shall not permit any new transactions in the margin account unless the resulting equity in the account would be not less than 150% of the debit balance. 16

(6) A member shall not permit the equity in a client's margin account to fall in any way below 125% of the debit balance. Once the equity falls below this level, the member shall have absolute discretion and without notice to the client to liquidate the margin account including the marginable securities deposited to bring the equity to not less than 150% of the debit balance.

(7) The Member shall cause daily review to be made of all margin accounts to ensure that credit is not over-extended beyond the approved facility and that the margin requirements prescribed above are met at all times. For the purpose of computing margin requirements in a margin account, the last traded price of the security on the preceding market day shall be used. All transactions traded on the same day shall be combined on a transaction date basis and the total cost of purchase or the net proceeds of sale including any commission charged and other expenses shall be taken into account for computing margin requirements.

(8) The member shall require substantial additional margin as the exchange with the prior approval of the Commission may from time to time prescribe in an account where the securities carried are subject to unusually rapaid or violent changes in value, or do not have an active market or have been suspended from trading on the exchange for more than seven days or where the quantity carried is such that it cannot be liquidated promptly.

(9) A client may withdraw cash or securities from his account provided that the equity in his account does not fall below 150% of the debit balance.

(10) The exchange shall have with the prior approval of the Commission the discretion to vary the margin requirements stipulated in sub-rules (4), (5) and (6) above.

(11) All securities transactions in a margin account shall be on a ready basis. The margin account shall not be used to subscribe for new issues of securities.

(12) For the purpose of these sub-rules :- (a) "debit balance" means the cash amount owed by a client in his margin account before deducting cash deposited by him as margin; (b) "equity" means the sum of margin and current market value of securities bought or carried in a client's margin account; (c) "margin" means the aggregate amount of cash and market value of securities deposited by a client into his margin account, but shall not include securities which are bought and carried in the margin account; (d) "marginable securities" means securities permitted by the exchange to be bought and carried in margin accounts.

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Though there are the existence of the rules and regulations for margin trading, but in real life margin trade does not take place in the Dhaka Stock Exchange. The only margin trading occurs when an investor requests the broker to buy a stock by phone call or when he is running short of money at that time. In this case, the broker pays the price for the stocks as a one-day loan and the investor has to pay the money back to the broker at the next trading date. The merchant banking of the union capital limited charges 15% interest on the loan provided to the investors.

Initial Public Offering (IPO) Initial Public Offering (IPO) means first offering of security by an issuer to the general public or a primary offering of shares by public limited company in the open market for buying by the public. The buyers of shares are then known as the shareholders and on their registration, as members of the Company. This is an open invitation to the public to participate in the ownership of the Company and thereby taking the risk of profit or loss of the undertaking to the extent of their participation .The shareholders sit together yearly at a meeting called the Annual General Meeting (AGM), and along with other businesses, appoint the Directors of the Company, and thus engage them for running the business. This is the whole philosophy behind public participation in shares of a company. The Purpose of IPO of BRAC Bank According to the Bangladesh Bank Circulation as a financial institution, every Public Limited Company (non-listed) shall come to the Capital Market through IPO within 3 years after starting its operations. Thus the small investors can invest more and take part in the economic development. If a company borrows money from other financial institutions, the company has to pay money in the form of interest on monthly installment on the borrowed amount; in contrast dividends may pay once in a year on the management decision. The objective of the IPO is to raise fund of the company through the capital market operation. The Public issue is the compliance of statutory requirement of the BRAC Bank Ltd. The proceeds will strengthen the capital base of the Bank and augment business expansion. The fund thus raised through this public issue would be generally used for investment and creation of assets.

Listing with DSE & CSE According to the Public Issue Rules, 2006, Section-16, subsection- (iv) BRAC Bank had applied along with the Listing fee for ordinary shares to the DSE & CSE for their consent as a listed company in the Capital market. After listing with the stock exchanges BRAC Bank applied to the Securities and Exchange Commission along with the listing documents for getting permission to start the trading.

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Listing Requirements In order for a company to have the eligibility to trade in the DSE, it must fulfill certain requirements. These requirements have been stated down as the Dhaka Stock Exchange (Direct Listing ) Regulations. Given below are the listing requirements as of April, 2006:

1. Short title :-(1) These regulations may be called the Dhaka Stock Exchange (Direct Listing ) Regulations, 2006.

(2)These Regulations shall be applicable for direct listing of shares of public limited companies.

2.

Requirements concerning capital and operation: The concerned companyi) shall have minimum paid up capital of Tk. 100 (one hundred) million; ii) shall have no accumulated loss; iii) shall be in commercial operation for at least immediate last five years;

iv) shall have profit in three years out of the immediate last five completed accounting/financial years with steady growth pattern; v) is regular in holding annual general meeting (AGM).

3. Listing: i) The company shall apply to the Dhaka Stock Exchange (the Exchange) with an application fee of Tk. 10,000/= (ten thousand), and shall simultaneously furnish a copy thereof, along with the copies of documents mentioned under subregulation (ii), to the Securities and Exchange Commission (SEC).

ii) The company shall, among others, submit the following documents along with the application:Memorandum of Association and Articles of Association.

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A brief profile of the company, including brief particulars of existing sponsor-directors of the company.

Certificate of Incorporation and Certificate of commencement of business.

Audited Financial Statements for the last five years.

Members/shareholders list together with their shareholding position.

Return of allotment(s) filed with the Registrar of Joint Stock Companies and Firms.

Existing material agreements, including deed of mortgage (if any).

Status of loan, including information concerning loan default, if any, of the company.

VAT and Tax identification numbers.

Due diligence certificate from the directors as per format prescribed by the Exchange. No objection certificate from the lending bank (s)/financial institutions of the company, if any, where applicable.

Undertaking in the prescribed form as laid down in the listing regulations of the Exchange to the effect that the company shall comply with the securities laws including requirements of the said listing regulations upon listing with the Exchange.

Relevant resolution (s) of the shareholders in the general meeting of the company and the Boards resolution, if so authorized, for the purpose of listing with the Exchange.

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Credit rating report issued by the credit rating company registered with the commission with minimum investment grade of BBB.

Information document as per format prescribed by the Exchange. The shareholders resolution in respect of disposal of shares in accordance with the regulation 5.

iii) Upon receipt of the application, the Exchange shall examine and inform the company within 15 (fifteen) days from the receipt of the application, with a copy to the Commission, to remove the deficiencies, if any, within 30 (thirty) days from the date of receipt from the Exchange.

iv) The Exchange shall furnish to the commission the copies of all information and documents received from the company pursuant to the Exchanges letter mentioned under sub-regulation (iii) within the following working day of receipt.

v) After fulfillment of all requirements by the company, the Exchange shall list the companys shares within three weeks from the date of Publication of the information document, as mentioned in regulation 4, under intimation to the Commission, provided there is no contrary opinion of the Commission in this respect.

vi) In case of failure to fulfill the requirements by the company, the Exchange shall reject the application for listing showing reasons thereof, under intimation to the Commission, within 60(sixty) days from the date of application..

4. The company shall publish an Information Document in at least two widely circulated national dailies minimum 7 (seven) days before commercial trade upon listing by the Exchange along with an electronic copy for posting in the web page of the exchange.

5. Disposal of shares: i) Existing shareholders of the company shall sell their shares through the exchange upon listing.

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ii) No existing shareholder of the company shall sell more than 50% of his existing shareholdings until the company holds the annual general meeting after completion of one full accounting year of the company upon listing with the Exchange.

Provided that the existing shareholders shall offer for sell at least 10% of the shareholdings in the company within 30 (thirty) working days from the date of listing.

6. Trading and settlement:

i) Trading of the shares listed under these Regulations shall be in dematerialized form.

ii) Existing provisions of trading and settlement of transactions of the Exchange shall be applicable in respect of the shares listed under these Regulations.

Conclusion Apart from the comparison with the NYSE, there have been complaints by both investors and brokers/members about the lack of integrity of the accounting firms that audit the reports of companies currently listed and those applying to be listed. Having said that, one should not overlook the fact that even in economically stable countries like America there have been accounting scandals like that of Enron and Worldcom. For this reason, Securities and Exchange Commission should continually try and set the highest of standards not only for accounting aspects, but also for governing and maintaining the established regulations. Sales and Trading UCL through its wholly owned subsidiary SES(Stock Exchange Seat) Company LimitedCorporate member of both DSE and CSE and full service depository participant of CDBL providing the following services Main activities of Sales and Trading are: International and Domestic Placement of Securities (Equity, Debt, etc) Full-Service Brokerage for Institutional and Retail (Individual) Investors in the Share Market Union Capital's predecessor was credited with a number of accomplishments in 1996 and 1997, which includes being one of the top brokers in the market, a preferred broker for most of the Foreign Institutional Investors (FII), a leader in placing most of the foreign tranches of IPOs and a brokerage house with no settlement defaults as confirmed by the multinational 22

custodian banks. The success story continues, as Union Capital remains the premier choice of the FIIs dealing in Bangladesh. Full-service retail brokerage is the latest and an exciting addition to S&T's services. The purpose of the Retail Brokerage division is to offer individual investors with international standard brokerage service. The Silver Premium Retail Account (SPRA) offers one of the most convenient, flexible and cost-effective ways to invest in the local stock market. Sales and Trading has designed a unique product for institutional clients which gives them the necessary tools to make prudent investment decision. The Silver Premium Institutional Account (SPIA) offers institutions an efficient and informed way to operate in the domestic capital market.

Research The main role of the Research Department (Research) is to provide independent and objective investment advice in relation to primary and secondary securities to retail and institutional investors. The research analysts at Union Capital work diligently to produce indepth company-specific fundamental research. In addition to fundamental analysis, Research analyzes the technical aspect of stocks and the market to follow particular trend of price movements. Research also provides crucial after-market service to CFIB clients by disseminating objective information to investors. Industry and sector analysis of Union Capital research reports contain detailed information on the current infrastructure and future growth potential, attractiveness of different sectors, through review on different companies in the sector through comparable and valuation analysis. Research also provides macroeconomic, political and market outlook of Bangladesh to foreign institutional investors. The Union Capital Index (UCI) is the leading benchmark of performance of selected bluechip stocks of the Dhaka Stock Exchange. It is published in major English and Bangla newspapers in the country. UCI is the first blue-chip index for the capital markets of Bangladesh. Research publishes daily price information, weekly reports, monthly reports and bi-annual reports. Other activities of the Research Department include writing articles for international publications on global securities market and providing financial data to information service providers of the foreign markets and preparing sector analysis for financial and banking institutions. Incorporation Dates Incorporation of the Company Commencement of Business License from Bangladesh Bank Registered with SEC as Merchant Bank August 09, 1998 August 09, 1998 August 12, 1998 April 10, 2002 23

Though the incorporation of Union Capital Limited was in 1998 the SES Company Limited began its operation during the 90s with the Peregrine Capital Limited The commissions charged by the SES Company Limited is 0.40% for the trade in secondary market and 0.70% for trade in primary shares. SES has been ranked 4th among the all the brokerage houses during October as declared by the DSE. The ranking is based on the Total turnover of the House. There has been a healthy improvement in the performance of the SES Company Limited over the past one year. The revenue increased from Tk 2,278,711 as of June 30, 2006 to Tk 7,246,817 as of June 30, 2007 with a staggering growth of 218.02%. The company is now looking forward to open a new Brokerage house in Sylhet. At present there are five permanent employees and two Interns working in this department. Recently the company has also started its new trading house in the DSE Building. The management team is experienced and dedicated. My job responsibility Activities of CDBL share: BO and Customer Account Open/Modify/Close. Manage Master Report. Monitoring CDBL stock position.e.g. BO ISIN Queries. To maintain all Demat process. Host Report Manager. Maintaining share registration file, Demat file, DSE/CSE allocation File, share in/out file. Pay Out/Pay In Process. Keep records of the daily price lists, and maintain database of everyday trade of volume of the company. Transmission and Transfer of Shares.

Activities of Non CDBL Share: Give the client different type of BO related services. Prepare Tax Certificate for Clients. To maintain process for making the payment of clients. Monitoring to give the client payment. To give the client stock position, ledger, Confirmation, profit & loss position I feel there are many opportunities in the market, which the company is not utilizing properly. Capital market is a growing sector and requires polished people to be employed to rip the highest benefit possible out of this market but as I have observed heard from internal

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sources the company could not retain many of the bright employee. In the last one-year five people has resigned from their job. This has been a common scenario not only n SES company but also in the other departments of the union capital. The biggest problem of this department today is that the mangers post has been empty for the last five month. This is a customer-oriented industry and providing quality customer service is absolutely essential in this sector, there have been complaints that small investors are not treated well by few employees which is a huge cause of concern for the company as words of mouth is very important media of advertisement and it might cause severe damage to the reputation of the company, and in process the company might lose potential large investors. Thererfore I would recommend that the higher authority must very soon find the cause of the employee dissatisfaction and also have good coordination with the present team of employees.

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BIBLIOGRAPHY

1. The listing regulation, modified up to 22nd July 1999

2. http://www.cdbl.org

3. http://www.dsebd.org

4. Monthly Review of Dhaka Stock Exchange.

5. http://www.nyse.com

6. http://www.bracbank.com

7. http://www.bdtradeinfo.com

8. http://www.wikipedia.org Interview: 9. Ariful Haque Mollick Associate Sales and Trading 10. Md. Alamgir Hossain Senior Associate Sales and Trading

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