The Dhaka and Chittagong bourses on Tuesday signed a memorandum of understanding for setting up a joint clearing corporation for smooth transaction in the stock market and payment for derivative instruments. The MoU was signed at the DSE office on the day after the DSE board had decided to set up a clearing corporation project jointly with the CSE.DSE chief executive officer Swapan Kumar Bala and CSE CEO Syed Sajid Husain signed the MoU on behalf of the respective bourse.
A clearing corporation, also known as clearing firm or clearing house, plays a key role to ensure that executed trades are settled within a specified period of time in an efficient manner.
DSE president Ahasanul Islam and CSE president Al Maruf Khan were present on the occasion.
‘A proposal of forming a clearing corporation will be prepared jointly under the MoU,’ a DSE official told New Age.
‘The proposal will be submitted to the Bangladesh Securities and Exchange Commission for its approval,’ he said.
‘After getting the regulator’s approval we will start the work by forming a separate company which will work as a clearing corporation,’ he said.
Both the bourses held a meeting on Tuesday in this regard.
‘A clearing corporation will help the bourses set up derivatives market and commodities market. It will also help settle the transactions in the bourses within a day,’ a CSE release said.
‘We have taken several attempts to set up a clearing house to settle transactions. The proposal was also sent to the Bangladesh Securities and Exchange Commission for its approval. But the commission is yet to respond,’ a DSE official said.
‘Settling transactions through separate clearing corporations is an international practice. But, the bourses are doing the job as we don’t have any such corporation,’ he said.
The CSE had also proposed that the BSEC set up a national clearing corporation for speedy settlement of transactions.
Finance minister Abul Maal Abdul Muhith in 2010 while replaying to a question about the capital market in the parliament had said that the government had taken steps to set up a ‘clearing corporation’ immediately for speedy and smooth transaction in the stock market.
-With New Age input
