DMD Circular No. 4: Formation of 'Government Securities Investment Window' for providing cliental services of Treasury Bills and Bonds

Bangladesh Bank (Central Bank of Bangladesh) Head Office Motijheel, Dhaka-1000 Bangladesh. Department of Management and Development

Page 1/2 DMD Circular No. 4/2020 06 Shrabon 1427 Bang Date: ----------------------- 21 July 2020 AD

Managing Director / Chief Executive Officer All Scheduled Banks and Financial Institutions operating in Bangladesh.

Dear Sir,

Regarding the establishment of the "Government Securities Investment Window" to provide cliental services for Treasury Bills and Bonds.

You are aware that resident individuals and institutions (such as insurance companies, corporate institutions, provident funds, pension funds, mutual funds, etc.) as well as non-resident individuals and institutional investors can invest in government securities through all scheduled banks and financial institutions operating in Bangladesh. To raise awareness among general investors and encourage investment in government securities, Bangladesh Bank has taken various initiatives, which have received a wide response from investors. Furthermore, potential investors are showing interest in investing in Treasury Bills and Bonds after obtaining information about the investment process. In addition, investor interest will increase manifold when trading begins on the Dhaka Stock Exchange platform for government securities.

2. Currently, any investor opens a "Securities Account" in the MI Module of Bangladesh Bank through the Treasury Division at the Head Office of a bank or financial institution and invests in government securities and conducts secondary market transactions. The Treasury Divisions of banks and financial institutions mainly conduct their own securities portfolio management activities alongside providing cliental services. However, due to the increasing number of potential investors in Treasury Bills and Bonds, it may become difficult for the Head Office Treasury Division to provide full-fledged cliental services alongside its own operational work. In that case, there may be obstacles in encouraging potential investors to invest in Treasury Bills and Bonds and in conducting related programs.

3. In this situation, you are hereby directed to establish a "Government Securities Investment Window" under the control/supervision of your respective Treasury Divisions to provide cliental services for potential investors in Treasury Bills and Bonds quickly and effectively.

4. The "Government Securities Investment Window" will perform the following programs: a) Providing information to potential investors in Treasury Bills and Bonds regarding investment methods including coupons/yields; b) Taking necessary arrangements for opening securities accounts for individual and institutional investors; c) Advising on opening bank accounts for the safety of services such as purchase-sale of securities, prompt payment of coupons and principal at maturity, and transaction safety; d) Executing programs related to the purchase/sale of relevant securities based on client requests; e) Properly executing matters such as timely payment of coupons, principal at maturity, and transactions involving additional funds along with purchase-sale against client accounts; f) Conducting reconciliation of clients' securities accounts from time to time; g) Conducting all related administrative work through regular communication with the own Treasury Division; h) Various programs including coordination of trading activities with the trading platform maintained at Bangladesh Bank as well as other potential platforms (e.g., DSE Trading Platform).

Page 2/2

5. The "Government Securities Investment Window" must be established within the next 03 (three) months. Before establishing the said window, considering the number of clients, you are advised to temporarily run investment-related programs through a Customer Service Desk at branches near the Treasury Division or by establishing an independent desk.

6. You are also requested to promptly notify this department by displaying the matter regarding the launched "Government Securities Investment Window" for providing cliental services for government securities and detailed information of the staff posted there (name, designation, contact number, email, branch address, etc.) on your own website before taking the aforementioned programs.

This directive will take effect immediately.

Yours faithfully,

(Md. Khurshid Alam) General Manager Phone: 9530131