Bangladesh Securities and Exchange Commission (Exchange Traded Derivatives) Rules, 2019

Registered No. D.A-1
Bangladesh Gazette
Extraordinary Issue
Published by Authority
Tuesday, May 28, 2019
[ Notifications and Notices issued by Private Persons and Corporations ]

Bangladesh Securities and Exchange Commission (Exchange Traded Derivatives) Rules, 2019

Notification No. U-6/I
Office of the Deputy Secretary to the Government of Bangladesh Udyog Bhaban, Dhaka-1207.

Date of Approval: 22 May 2019
Ref. No. BSEC/ED/2019-369/218/Off/86.---In exercise of the powers conferred by section 33(1) of the Bangladesh Securities and Exchange Commission Ordinance, 1969 (Ordinance No. XXVI of 1969), the Bangladesh Securities and Exchange Commission hereby makes the following rules, namely:

1. Short title and commencement.---(1) These rules may be called the Bangladesh Securities and Exchange Commission (Exchange Traded Derivatives) Rules, 2019.
   (2) These rules shall come into force at once.

2. Definitions.---(1) Unless there is something repugnant in the subject or context, in these rules, the following terms shall have the meanings respectively assigned to them, namely:
   (a) "Exchange-Traded Derivative" means a derivative traded on a stock exchange; (b) "Clearing Corporation" means a body corporate established under the Bangladesh Securities and Exchange Commission (Clearing Corporation) Ordinance, 1993 (Ordinance No. XV of 1993); (c) "Derivatives" means contracts traded on the stock exchange under the Securities and Exchange Ordinance, 1969 (Ordinance No. XXVI of 1969); (d) "Underlying Asset" means the asset, index, or commodity upon which the derivative is based; (e) "Margin" means the security deposit required to be maintained by the trading member or clearing member with the clearing corporation or exchange to cover the potential losses arising from the position held, including initial margin, variation margin, and settlement guarantee fund; (f) "Clearing Member" means a member of the clearing corporation who is authorized to clear and settle trades executed by trading members or themselves; (g) "Trading Member" means a member of the stock exchange who is authorized to execute trades on behalf of clients or themselves; (h) "Settlement" means the process of transferring securities and funds between the buyer and seller after a trade is executed; (i) "Clearing Fund" means the fund established by the clearing corporation to ensure the performance of obligations arising from derivatives trading; (j) "Risk Management System" means the system established by the clearing corporation to monitor and manage the risks associated with derivatives trading; (k) "Variation Margin" means the daily settlement amount paid or received by a member to adjust the value of their open positions to the current market price; (l) "Initial Margin" means the security deposit required to be deposited by a member at the time of opening a position in derivatives; (m) "Settlement Guarantee Fund" means the fund established by the clearing corporation to cover losses in the event of a default by a member; (n) "Clearing Process" means the process of matching, confirming, and settling trades executed on the exchange; (o) "Trade Confirmation" means the process of verifying the details of a trade between the buyer and seller; (p) "Settlement Date" means the date on which the delivery of securities and payment of funds takes place; (q) "Delivery