Bangladesh Stock Market: 50 Frequently Asked Questions

1. What is the Dhaka Stock Exchange (DSE)?

The DSE is Bangladesh’s main stock exchange, based in Dhaka. It was established in 1954 and is a public limited company. It has over 300 listed companies trading equities, bonds, mutual funds, and other securities. The DSE uses an electronic trading system (DSE Flex) and is regulated by the Bangladesh Securities and Exchange Commission (BSEC).

2. What is the Chittagong Stock Exchange (CSE)?

CSE is the second stock exchange in Bangladesh, started in 1995 in Chittagong. It lists hundreds of companies (including many that also trade on DSE) and provides similar securities trading facilities. CSE is also under BSEC oversight and uses an automated trading platform.

3. How many companies are listed on DSE and CSE?

As of 2025:

• DSE: ~300+ listed companies (651 securities)
• CSE: ~250 listed companies
  Both exchanges list common companies and some mutual funds/bonds.

4. What instruments can be traded on the exchanges?

• Shares of listed companies
• IPOs
• Rights issues
• Bonus issues
• Debentures and perpetual bonds
• Government securities (T-bills/bonds)
• Mutual fund units
• OTC market securities
• SME Board and ATB listings
• Islamic Shariah-compliant instruments

5. What are the major stock indices in Bangladesh?

• DSE: DSEX (broad-market), DSES (Shariah), DS30 (blue-chip)
• CSE: CSE All-Share Index, CSE-30

6. Which regulator oversees the Bangladesh capital market?

The Bangladesh Securities and Exchange Commission (BSEC), established under the Securities and Exchange Commission Act of 1993.

7. What are the trading days and hours?

• Days: Sunday to Thursday
• Hours: 10:00–14:30 BST (adjusted during Ramadan)

8. How do I open a stock trading account?

• Open an account with a TREC-holder broker
• Open a BO (Beneficiary Owner) account with CDBL
• Submit required documents (ID, bank account, KYC, photos)

9. What is a BO (Beneficiary Owner) account?

A BO account holds securities electronically. After trades settle, shares are credited/debited to this account through CDBL.

10. How do I place a buy or sell order?

Via broker’s terminal. Specify:

• Stock
• Order type (limit, market)
• Quantity
• Validity

11. What order types are available?

• Limit Order
• Market Order
• Conditional Orders: FOK, Partial-fill-or-cancel, Minimum-fill

12. What is a stop-loss order?

A stop-loss order triggers a market sell/buy at a preset price to minimize losses.

13. What is an auction order?

Used in special post-market auction sessions for price discovery and bulk deals.

14. What are block or bulk trading orders?

Large trades executed outside normal order books, used mainly by institutions.

15. Are odd lots allowed?

Yes, on the odd-lot board for quantities below standard lot size (100 shares).

16. Are short sales allowed?

Short selling is not operational despite being legislatively allowed.

17. Can I trade on margin?

Yes, under regulated conditions (1:1 loan-to-collateral ratio, strict rules apply).

18. What are margin requirements and ratio?

• Current: 1:1 (50% margin)
• Proposed: Higher minimums, stricter duration, investment caps

19. What is the settlement cycle for trades?

• T+2: Standard for A/B stocks
• T+9: For Z-category stocks
• T+0/T+1: For spot market

20. How does clearing and settlement work?

Gross clearing system using CDBL and fund transfer via brokers or clearing house.

21. What is Delivery versus Payment (DVP)?

Securities and funds are exchanged simultaneously; ensures secure settlement.

22. How is the clearing house involved?

It calculates broker obligations and facilitates settlement, using security deposits as guarantees.

23. What types of securities are dematerialized?

All listed equities, bonds, and mutual funds are held electronically via CDBL.

24. How do I track my holdings and orders?

Through broker platforms, CDBL portals, and official exchange reports.

25. What is an IPO and how do I apply?

An IPO allows companies to raise capital by public share issuance. Apply via broker.

26. What is the IPO subscription process?

• Apply during IPO window
• Funds are blocked
• Shares allocated by lottery if oversubscribed

27. How are IPOs priced?

Mostly fixed-price method. Rare use of book-building.

28. What is a Qualified Investor Offer (QIO)?

A private issue to qualified investors, usually by SME-board companies.

29. What are listing requirements for companies?

• Tk 15 Cr paid-up capital
• 3 years of profits
• Clean CIB record
• Prospectus and public offer

30. What is the SME Board?

Market segment for companies with Tk 50–300 million post-offer capital and relaxed listing norms.

31. What is the Alternate Trading Board (ATB)?

Platform for unlisted/delisted securities, including private equity, debt, and mutual fund units.

32. What corporate governance rules apply to listed companies?

• Independent board members
• Audit committees
• Female directors
• Disclosure and AGM rules

33. What disclosure requirements do listed firms have?

• Quarterly and annual reports
• Insider share trades
• Material event disclosures
• IFRS-compliant reporting

34. What is insider trading and is it allowed?

It is illegal. Insider trading regulations prohibit trading on non-public information.

35. What happens if a company or broker violates rules?

BSEC may fine, suspend, or delist violators. Brokers can be penalized or barred.

36. What is market manipulation and how is it prevented?

Illegal tactics (pump-and-dump, circular trading) are monitored and penalized by BSEC.

37. What is a circuit breaker (price limit)?

Daily limit of ±10% movement. Prevents excessive volatility.

38. How are opening and closing prices determined?

• Opening: Auction matching
• Closing: Weighted average of last 30 mins of trading

39. What trading interruptions can occur?

• Breach of circuit limits
• Pending news
• Market-wide halts

40. How does the circuit breaker work in practice?

Stock halts for the day after hitting the ±10% limit. Temporary pauses may apply.

41. What taxes apply to stock market transactions?

• Dividend Tax: 10% (resident individuals), 20%–30% others
• Capital Gains Tax: 15%
• Stamp Duty: 0.1% buy, 0.05% sell

42. Are capital gains tax and dividend tax the same for foreigners?

Yes, unless reduced by treaty. Foreign individuals: 30% dividend WHT.

43. How is withholding tax collected on securities?

Automatically by brokers and issuers. Investors self-report gains.

44. What fees do brokers charge?

• 0.1–0.3% commission
• Transaction levy: 0.1% buy / 0.05% sell
• Trading and clearing fees apply

45. What is the Investors’ Protection Fund?

Compensation fund for broker defaults (e.g., Tk 500,000 cap per client).

46. How is the Investors’ Protection Fund funded?

• Exchange contributions
• Broker levies
• Listing fee percentages

47. How can I complain about a broker or a security?

Contact the broker first. Then escalate to exchange or BSEC grievance cell.

48. What is BSEC’s role in dispute resolution?

Investigates and adjudicates violations. Can order compensation and penalize entities.

49. What is demutualization?

DSE and CSE are now public companies; brokers no longer own the exchanges.

50. Can companies be delisted?

Yes, for regulatory non-compliance or voluntarily, with approval.

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