Welcome to our presentation

2. Welcome to our presentation

3. Its group “E”. We are….. Md. AzizurRahman (16131). Md. DelwarHossain (16149). FahmidaMunmun (16160). AsmaArifa (16164). SakibHasan (16165). Hosni Jahan (16174). TunishaChakma (16180). Md. TamijAhammed (16252). Md. Tanvir Ahmed Kalince (16254). Tahasin Reza Khan (15083). S. K. Rashed Ahmed (14147).

4. We will discuss about “Chittagong Stock exchange” (cse).

5. Chitta-gong Stock Exchan-ge.

6. Background of CSE. • CSE is the second stock exchange of Bangladesh. • The founder members approached the Bangladesh Government in January 1995 for CSE. • CSE obtained the permission of the Securities and Exchange Commission on February 12, 1995 for its operation. • CSE began its journey at 10th October of 1995 . • CSE began its operation through the cry-out trading system . • CSE promised to create a state-of-the art bourse in the country. • CSE was formally opened by then Honorable Prime Minister of Bangladesh on November 4, 1995.

7. Mission of cse The mission of CSE is to create an effective, efficient and transparent market of international standard to serve and invest in Bangladesh in order to facilitate the competent entrepreneurs to raise capital and accelerate industrial growth for overall benefit of the economy and keep pace with the global advancements.

8. Objectives of cse Develop a strong platform for entrepreneurs raising capital; Provide a fully automated trading system with most modern amenities to ensure: quick, easy, accurate transactions and easily accessible to all; Undertake any business relating to the Stock Exchange, such as a clearing house, securities depository center or similar activities;

9. Develop a professional service culture through mandatory corporate membership; • Provide an investment opportunity for small and large investors; • Attract non-resident Bangladeshis to invest in Bangladesh stock market; • Collect preserve and disseminate data and information on stock exchange; • Develop a research cell for analyzing status of the market and economy.

10. Milestones of cse

12. Legal basis of cse CSE is a not-for-profit public limited company. CSE has a separate secretariat independent of policymaking Board which comprises of brokers and non-brokers directors with equal proportion to ensure the transparency. CEO is the head of this board. CSE activities are regulated by it’s own regulations and by laws along with the rules, orders and notification of the SEC.

13. Parliament Ministry of Finance Securities and Exchange Commission Chittagong Stock Exchange Members REGULATORY STRUCTURE OVERVIEW

14. ORGANISATION STRUCTURE General Body Committees CEO CEO in Committee Finance & Administration Listing, Marketing & Education Market Operation Clearing, Settlement & DP Systems Research, Corporate Development & Information

15. BOARDS OF DIRECTORS There are 24 members in the policymaking board of CSE. 12 of them 12 are elected and 12 are non-elected. This Board comprises of one President, three Vice Presidents, 19 Directors. They board members are….. Mr. FakhorUddin Ali AhmedPresident Mr. Al MarufKhan,FCAVice-President Mr. A.Q.I. Chowdhury,OBE Vice-President

16. Mr. TareqKamal Vice-President • Mr. Abu Sayed Md. Shahidullah Director • Mr. ASM Nayeem,FCA, FCCADirector • Mr. BijanChakrobortyDirector • Mr. MirzaSalmanIspahaniDirector • Mr. M.K.M. MohiuddinDirector • Mr. Md. MofizuddinDirector

17. Mr. Mohammed Mohiuddin, FCMADirector • Mr. NasiruddinAhamedChowdhuryDirector • Prof. Abu AhmedDirector • Dr. Abul K. A. MubinDirector • Mr. Aftabul Islam, LLB, FCADirector • Mr. Amir Humayun Mahmud ChowdhuryDirector

18. Mr. Anis A. KhanDirector • Mr. FarooqSobhanDirector • Mr. KutubuddinAhamedDirector • Mr. Mamun RashidDirector • Mr. Md. Sarwar-E-AlamDirector • Dr. Moinul Islam MahmudDirector

19. Mr.Yussuf Abdullah Harun, FCADirector • Dr. ZaidiSatterDirector • Professor Dr. Mohammed Abdullah MamunCEO & Director

20. Management CEO Function of CEO & various departments: The System department: Deals with information technology. Clearing & Settlement department: Deals with various kinds of delivery. Market operation department: Deals with various kinds of monitoring & dissemination.

21. Listing, Marketing & Educational department: • Arrange training & monitor information. • Finance & Administration department: • Deals with financial & administration side. • Research & Information department: • Deals with research & public relations.

22. trading Trading system CHITTRA. Order matching mechanism: Method-1: Orders are sorted and matched with opposite orders of the best price. Method-2: Orders are queued for matching at a specified time at a single price.

23. Trading orders Limit order: The most frequent order that has time limit. Good till cancelled(GTC): Remains in the system for a period of time. Good for day(GFD): Remains in the system for one day. Good till date(GTD): Remains in the system for a specific number of days.

24. Regulations regarding price fluctuations The following table shows the standard upward and downward price limit over the previous day’s market price :

25. COMPUTATION OF OPENING & CLOSING PRICE The opening price of a security shall be the price at which maximum number of securities is matched. The closing price of scripts are computed on the basis of weighted average price of all trades in the last 30 minutes. During the last 30 minutes, the weighted average price of maximum 50 number of trades. The opening price of a security shall be treated as closing price.

26. PRICE LIMIT It means a price control mechanism. Price limit on the securities trades of ‘A’ ‘B’ ‘G’ & ‘N’ category companies. Here is the guideline for price limit:

27. Inapplicability of Price limit Price limit will not be applicable for: There is no Price limit for Z category companies. A newly listed securities is allowed for free trade for first 5 consecutive market days. Free trade is allowed on the subsequent trading day of receiving price sensitive information. Free trade is allowed on the first trading day subsequent to the second date.

28. Margin requirements with cse Focuses on volatile trading activities and settlement failure additional trade exposure As per CSE regulations 2000 the rate of depositing the members margin with the clearing house on the additional trade expposure are as follows-

29. BENEFITS OF LISTED COMPANY IN CSE Transparency; Internet trading system; Visibility; Short settlement period; Facility to the listed companies to broadcast their corporate announcements; Very competitive low listing fees.

30. The Criteria For Listing CSE considers both the criteria of the companies and the sufficiency of public interest. However , the rules and regulations regarding listing are given below: The company shall be public limited under the company act 1994. Minimum capital should be $10 million. Share subscription must be by at least 250 applicants. However , the total listing fee shall be minimum of tk. 10,000 and maximum 2,000,000.

31. DE- LISTING OF THE COMPANY Cancellation of listing criteria are given below: If the company fails to comply with the requirements of any of CSE listing regulations. If the CSE focuses on the interest of the investors. When the company fails to pay any penalty or any dues to CSE for 2 years. If company fails to declare dividend or bonus.

32. When fails to hold AGM for continuous periods of 3 years. • Company gone into liquidation either voluntarily or court order. • If company fails to pay annual list fee for 2 years. • If securities are quoted below 50% of face value for 3 calendar years.

33. CSE investor information cell(IIC) In April 2002, CSE had developed a cell named investor information cell(IIC) dedicated exclusively to resolve any kind of query or produce any kind of information that an investor may require rerated to the capital market. It receives queries and complaints over telephone, fax messages, e-mails, correspondences and physical visits. Since its inception the IIC has developed a good relation with the investors by responding to a number of queries and complaints from home and abroad . The cell also resolved investors complaints against member firm and listed companies .It has earned the trust of investors as a help centre.

34. Lodging complaint against broker If the broker fails to meet an obligation to you arising out of stock exchange transaction or if it is unable to fulfill its engagement the client has the right to lodge a complaint with the exchange against such default . But the time limit for lodging complaint is within a period of 60(sixty) days from the date when such default arose. The defaulters committee of CSE shall hear both the parties and recommend the board for necessary action . The board may declare a broker as defaulter . For its failure to meet the obligation towards the client within the time limit decided by the board.

35. CSE investors protection fund What protects the client if the broker company becomes insolvent or it goes winding up? That is why the CSE investor protection fund exist. The CSE ,in collaboration with at member companies established CHE investor protection findin1999 to compensate within define limit ,the claims of the client against defaulting broker. You the investor, pay no fees for getting protection of the fund. Coverage is automatic when you open an account with a CSE member . However you must lodge the claims to the trustees within 6 months from the date of declaring defaulter of the member.

36. Opening Of Account The process of opening an account with representative (Depository participant) is similar to the opening of a bank account. You require to sign an agreement with agent which will set out the rights and duties of the both you and the exchange. The agent will maintain your securities account balances to you the status of your holding from time to time.

37. Fees for account opening The introductory offer prices are as follows:

38. Market surveillance and compliance monitoring CSE maintain an effective surveillance to detect and prevent unethical, unusual and illegal practice in the market. when any unusual market action occurs it is reported to the manager, compliance and surveillance.

39. Enforcement CSE put in place a thorough risk management system which is regularly monitored to premt market failures. The department conducts investigation of any act of member firm or listed companies, as the case which may be deemed to violate the rules and regulations of CSE or SEC and gather all evidence concerning the said acts to pass it to the relevant committee.

40. Stock price index A number which measures the relative price level of securities against a base date. Base price index is 1000 at CSE

41. Calculation of Index

42. Classification of index methods Sample index: Some active share. All share price index: All share of market. Weighted index: Value weighted: Based on proportion of market share in terms of capitalization. Equal weighted: Weighted value of all share. Price weighted : Weighted value of share based on price. CSE30 index: some active share which pass some criteria.

43. Basic criteria in case of CSE30 index Must be listed with the CSE ltd. Must hold AGM regularly. Market capitalization must be TK 200 million. Must have positive revenue reserve/ retained earnings. Paid dividend in any of the last 2 years. Company failing to pay the listing fees and/or penalty imposed under the listing regulations of CSE for a period of two years will not be considered.

44. Selection criteria Higher net assets value per share. Higher rate of earning per share. Higher rate of dividend. Higher dividend yield. Larger number of shareholder. Higher liquidity in terms of trading day. Regular payment of listing fees.

45. Members In the Chittagong Stock Exchange a Corporate body must have a minimum issued and paid-up capital of BDT 2.5 million to become a member. Individuals may apply and receive membership on condition that they form a corporate body within a given time , usually 3 months.

46. Eligibility The eligibility criteria for the membership are given below: A corporate body with a minimum paid up capital of BDT 2.5 million. Any partner or director thereof as the case may be is\has not Less than 21 years of age; Bankrupt; Person of unsound mind;

47. Person convicted by a competent court of an offence involving moral turpitude; • Involved in any misconduct in respect stock exchange market. • Individual may apply and receive membership on condition that they form a corporate body within a specified time , usually 6 months from the date of the allotment letters issued to them.

48. Brokers\dealers Broker and Dealers shall be eligible to trade in CSE when it: Becomes a member of the CSE; Becomes a member of the CSE Clearing House; Open a Clearing Account with a Depository Participant of CDBL; Obtains a Brokerage\ Dealership license from SEC. A broker, dealer or their authorized representatives complies with Code of conduct prescribed by SEC.

49. Compliance With Respect to Brokers/Dealers The CSE brokers\dealers are required to comply with various requirements for continuing membership. These include: Submission of: Audited Annual Accounts within four months of the end of the financial year; Monthly Net Capital balance report; Any changes of stock dealers/stock brokers should be informed to the commission within 15 days through stock exchange;

50. Compliance Authority report relating to the compliance of rules and regulations of the Exchange and SEC by his/her member company. The report will have to submit the report to the Exchange within 15 days after the end of every six-months period ending on 30th June and 31st December of the year. • Maintenance of the net worth at least half of its paid up capital at all times. • Renewal of their license annually with SEC.