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2.

1 Introduction
A stock exchange is a place where secondary shares are bought and sold. The efficiency and
effectiveness of the financial market and the progress of the overall economy largely depend
on the role of the stock exchange. The Dhaka Stock Exchange is the prime bourse of the
country. Through its automated trading system, the exchange offers facilities for smooth
transparent and highly efficient provisions for secondary market activities of shares,
debentures and wide varieties of other securities. Managed by a strong Board of Directors of
12 members, the overall operations of the exchange are professionally run by a team of
qualified executives. The Dhaka Stock Exchange is the rallying point for enterprises to raise
capital in Bangladesh. With a nationwide membership of 250 brokers and dealers, DSE
espouses shared vision of Bangladeshi businesses all over. The exchange maintains the lead
in providing the perfect launch pad to raise capital by mobilizing savings of general people to
set up large industries.

2.2 History of Dhaka Stock Exchange Ltd.


Dhaka Stock exchange ltd. was first incorporated as East Pakistan Stock Exchange
Association Ltd on 28 April, 1954 and started formal trading in 1956. It was renamed as East
Pakistan Stock Exchange Ltd on 23 June, 1962. Again it was renamed as Dacca Stock
Exchange Ltd on 13 May, 1964. After the liberation war in 1971 the trading was discontinued
for five years. In 1976 trading restarted in Bangladesh. In 1986 it was renamed as Dhaka
Stock Exchange Limited. The formula for calculating DSE all share price index was changed
according to IFC on 1 November, 1993. The automated trading system was initiated on 10
August, 1998. A Central Securities Depository System was initiated on 24 January 2004.
Central Depository System (CDS) for electronic settlement of share trading made debut in the
DSE. The Dhaka Stock Exchange has become a full Depository Participant (DP) of CDBL to
facilitate the trading of its non- DP members. In its 50-year journey, the stock exchange has
made significant contribution to the economy of Bangladesh providing the unique venue to
raise investment from the public. The stock exchange is in a relentless process of
modernization of its systems and facilities in latest technologies available. There are 529
securities listed on the DSE with a market capitalization of Taka 2,635,785 million.

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History of Dhaka Stock Exchange at a glance


Incorporated as East Pakistan Stock Exchange Association

28 April,1954

Ltd.
Started Formal Trading

1956

Renamed as East Pakistan Stock Exchange Ltd.

23 June, 1962

Renamed as Dacca Stock Exchange Ltd.

13 May, 1964

Trading Suspended Under New Trade Policy


Trading Restarted in Bangladesh
Renamed as Dhaka Stock Exchange Ltd.

16 December, 1971
16 August, 1976
1986

Starting of Automated Trading

10 August, 1998

Start of CDS through CDBL

24 January,2004

Starting of Govt. Bond Market

01 January, 2005

DSE Chittagong Office Inaugurated

22 November, 2007

DSE Sylhet Office Inaugurated

30 March, 2008

Web Based Trading Software-MSA Plus Introduced

10 June,

2012

Table: 1 History of DSE

2.3 DSE as an Organization


Dhaka Stock Exchange is a public limited company. It is formed and managed under:
Companies Act 1994.
Security and Exchange Commission Act 1993
Security and Exchange Commission Regulation 1994
Security Exchange (Inside Trading) regulation 1994
Memorandum and Articles of Association
Other relevant laws of Bangladesh.

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2.4 Management of DSE


Like most of the other organizations, the management and the operation of Dhaka Stock
Exchange Ltd. are conducted by board of directors and management committee. The
members of the Board of Directors are responsible for policy making. A highly qualified and
trained professional Management Team is running day to day operations and implements the
policies formulated by directors. The Chief Executive Officer is the head of Management
Team of the Exchange. The management team directly reports to the CEO. The Management
team runs independently under policies set by the Board of Directors.

2.5 Goal of the Organization


The main goal of the organization is to establish a stable and sound securities market based
on equitable principle of trade as well as to conduct the business giving due concerns to the
public interest. The exchange provides the listed companies an opportunity to seek capital
from the public and at the same time it provides the investors a place to buy and sell the
shares of the listed companies.

2.6 Objectives of Dhaka Stock Exchange Ltd.


The objectives of DSE are following:
To develop a strong platform for the entrepreneurs for raising capital.
To provide an investment opportunities for small and large-scale investors.
To develop a transparent market ensuring investors interest.
To provide a fully automated trading, clearing and settlement system to ensure quick,
easy, accurate transactions.
To attract non-resident Bangladeshi to invest in Bangladesh stock market.
To attract foreign institutional investors to invest in Bangladesh stock market.
To collect, preserve and disseminate data and information on stock market.
To develop a corporate culture through mandatory corporate membership.
To develop a research cell for analyzing status of the market and economy.

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2.7 The Functions of Dhaka Stock Exchange Ltd.


The major functions of Dhaka Stock exchange ltd. are as follows:
Listing of companies.
Providing the market place for trading of listed securities.
Providing the screen based online automated trading of listed securities.
Settlement of trading (As per Settlement of Transaction Regulations).
Administration and control of market.
Market surveillance.
Monitoring the activities of listed companies.
Investors Grievance Cell (Disposal of complaint by-laws 1997)
Investors Protection Fund (As per Investors protection fund Regulations 1999)
Gifting of shares / granting approval to the transaction / transfer of shares outside the
trading system of the exchange. (As per Listing Regulations 42)
Publication of daily index and monthly review etc.

2.8 Board of Directors of Dhaka Stock Exchange Ltd.


The number of the board members of DSE should not be less than 5 and more than 25.The
DSE board comprises of 12 members. Among them 4 are elected from DSE members,
another 7 independent directors are selected from different trade bodies and relevant
organizations. The CEO is the 12th ex officio member of the board. The following
organizations are currently holding positions in DSE Board:

Bangladesh Supreme Court

Base Chemicals Bangladesh Ltd.

Federation of Bangladesh Chambers of Commerce and Industries

University Grants Commission of Bangladesh

Professor of Department of Accounting & Information Systems, University of Dhaka

Prime Dell

CSE

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Board of Directors

President

Senior Vice-President

Vice-President

Shareholder Directors

Independent Directors

Figure 1: Board of Directors

2.9 Trading Session of Dhaka Stock Exchange Ltd.


Dhaka Stock Exchange Ltd. is open for trading from Sunday to Thursday between 10:30 am
2:30 pm BST, with the exception of holidays declared by the Exchange in advance. In the
month of Ramadan, the trading hour changes.

2.10 Regulatory Structure Overview


Dhaka Stock exchange ltd. is one of the most important institutions of the capital market in
Bangladesh. However, the functions of DSE are supervised by the regulatory authorities
including the Parliament of Government of Peoples Republic of Bangladesh and Ministry of
Finance. DSE performs the duties as per the rules and regulations of Bangladesh Securities
and Exchange Commission (BSEC).

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Figure 2: The Regulatory Structure of DSE

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2.11 Organizational Structure of Dhaka Stock Exchange Ltd.


Dhaka Stock Exchange Ltd.
Board of Directors
CEO

Finance
Division

1. General
Accounts
Department
2. Clearing
Accounts
Department
3. DSE FSDP
Department

4. Clearing
house
Department

ICT
Division

1. System &
Market
Administration
Department
2. Network
Development
Department
3. Back office
Development
Department
4. Hardware
Support
Department
5. Application
Support
Department

Administrative
Division

1. Membership
Affairs
Department
2. Board &
Company
Affairs
Department
3. HRM, Admin
& Training
Affairs
Department
4. Logistic,
Maintenance &
Protocol
Department

Operation
Division

1. Monitoring,
Investigation &
Compliance
Department
2. Surveillance
Department
3. Listing Affairs
Department
4. Market
Operations
Department
5. Internal Audit
& Compliance
Department

5. R & D
Department
6. Publications
& Media
Monitoring
Department

6. OTC Market
Department

7. Public Relations
Department

Figure 3: Organizational Structure of Dhaka Stock Exchange


8. Legal Affairs

9. Security

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10. DSE Training
Academy

2.12 DSE Membership


DSE has now 250 members who are the shareholders of this Public Limited Company.
Bangladesh Securities and Exchange Commission (BSEC) issues licenses for conducting
trading as stock dealer or broker to the members. Membership of DSE is open to foreigners.
A statistical overview of DSE Membership is as follows:

Year

Total Number of Members

2003

195

2004

230

2007

235

2008

238

2013

250

Table 2: Total Number of Members of DSE

2.13 DSE Indices


The Dhaka Stock Exchange presently computes three indices. These are as follows:
Sl. No

Index Name

Base Index

DSEX

2951.91 (January 17, 2008)

DSES

1000

DS30

1000 (January 17, 2008)


Table 3: DSE Indices

1. DSEX: DSEX is the Broad Index of the Exchange (Benchmark Index) which reflects
around 97% of the total equity market capitalization.
2. DSES: The DSE Shariah Index (DSES) serves as a Sharia-compliant broad market
benchmark measuring the performance of the Bangladesh equity market. The index is
constructed as a subset of the DSE Broad Index (DSEX) and includes all stocks
included in the parent index that pass rules-based screens for Sharia compliance.

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3. DS30: DS30 constructed with 30 leading companies which can be said as investable
Index of the Exchange. DS30 reflects around 51% of the total equity market
capitalization.

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