The Dhaka Stock Exchange plans to scrap the existing lot-based trading of shares by October this year in a bid to reduce investors’ hassle in trading odd-lot shares.
Once the bourse scraps the lot-based trading system, the investors will be able to trade any amount of shares, DSE managing director Swapan Kumar Bala told New Age recently.
When any company issues stock dividends, in most of the cases, shares of such stocks become odd lot and investors face difficulty to sell them.
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.
‘The process of trading shares in any quantity will be available when the matching of NASDAQ and order management system of FlexTrade will be available for use. But, our target is to complete all the process before that,’ said Swapan.
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 said as per the agreement with the vendors it would take seven-and-a-half months for installing the new trading system.
Due to the limitations of the existing trading system, the bourse is in delay to scrap the system despite different hassles of investors, he said.
The Dhaka bourse MD said scrapping of the lot process would require amendment to the bourse’s trading regulations.
Approval of the board and the Bangladesh Securities and Exchange Commission is also other requirement to start the process, Swapan said.
However, the lot-free trading system may create problem for the companies in holding annual general meeting as the number of individual shareholder of the companies might increase significantly due to the scope of holding only one share of a company, another DSE official said.
In 2011, the BSEC, after the market crash, set a uniform face value of Tk 10 for all the listed securities and unites which resulted huge increase in number of shares as more than half of the listed companies’ shares’ face value was Tk 100.
-With New Age input
