The Dhaka Stock Exchange has set fresh timeframe to introduce its new automated trading system by extending the deadline by another two months as the bourse finds it difficult to finish the task by October this year on some technical grounds.
‘The timeframe to introduce the new automated trading system has been delayed by two months on some technical grounds,’ a senior DSE official told New Age recently.
Earlier, the timeframe was set by October keeping seven-and-half months for both the vendors to complete the instalment process of the matching engine and order management system, the official said.
Due to some technical requirements, the instillation process of the order management system was started by the halfway of the matching engine installation for synchronisation process, he said.
He also said that the installation process of the matching engine was almost finalised with some fine-tuning.
The DSE on March 21 signed an agreement with NASDAQ OMX, an American multinational financial services corporation, for purchasing a matching engine and FlexTrade, a US-based multinational company, for order management system.
Another official of the bourse earlier said that as per the agreement with the vendors it would take seven-and-a-half months for installing the new automated trading system.
The bourse in January, following a regulatory order, planned to scrap its existing trading system as most of its hardware became outdated.
DSE’s plan to introduce lot-free trading of shares would also be delayed due to the newly set timeframe.
Reducing investors’ hassle in trading odd-lot shares was the prime reason behind the bourse’s decision to scrap the lot-based trading.
As per the existing process, investors are supposed to trade shares in lots.
Lot differs from company to company as 10 shares of some companies make a lot while others make a lot in 50 shares.
Introducing two index-based exchange-traded funds would also be delayed accordingly due to the delay in introducing automated trading system, the senior DSE official said.
The bourse earlier planned to introduce two-ETFs by October when it would launch its automated trading system in line with its business plan.
As part of the bourse’s business plan approved by the Bangladesh Securities and Exchange Commission with its demutualisation scheme, launching of ETFs was the first priority of the bourse.
The two ETFs will be formed based on DS30, the blue-chip index of DSE, and DSES, the shariah index of the bourse, DSE managing director Swapan Kumar Bala had told New Age.
An ETF is like a mutual fund that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange, the DSE’s business plan said.
Once the bourse launches its new automated trading system, it will facilitate trading all these products in the bourse, DSE MD also said.
The DSE at present facilitates trading of equities, mutual funds, debentures and bonds.
The bourse within 2020 aims to attain a sustainable average daily turnover of Tk 25 billion, ensure steady domestic and offshore institutional investments of at least three-fourth of the total investments in the market, the DSE business plan said.
The plan also aims at attaining at least 30 per cent foreign participation of the total market capitalisation, doubling the total number of listed securities, increasing depth and liquidity of bond market, including bringing in the government securities under trading net, and increasing breadth by listing new products, the plan said.
-With New Age input
