Guidelines for Panelization of Back-Office Software Suppliers for TREC Holder Companies

Bangladesh Securities and Exchange Commission
Securities Commission Building, E-6/C Agargaon, Sher-e-Bangla Nagar Administrative Area, Dhaka-1207, Bangladesh.

Ref No- BSSEC/SMMI/2022-188/672 Date: 02 October 2023

Guidelines

Whereas, the Bangladesh Securities and Exchange Commission (hereinafter referred to as "the Commission") has been informed that some TREC holder companies operating in the capital market use Back-Office Software for tasks such as creating Transaction Ledgers for investors' financial and securities transactions, preparing Trading data, and preparing Clearing and Settlements data; this software allows users to edit or delete inputted data after it has been entered, and does not maintain a comprehensive Audit Trail for management;

Whereas, it appears to the Commission that such activities have harmed the interests of investors in the capital market and disrupted the discipline of the capital market;

Therefore, whereas, in the interest of investors in Bangladesh's capital market and to preserve market discipline, the Commission will panelize institutions supplying Uneditable Back-Office Software to be used by TREC holder companies for the above-mentioned activities, subject to the preparation of relevant Guidelines by the Dhaka Stock Exchange Limited and Chittagong Stock Exchange PLC by December 31, 2023; and all TREC holder companies shall comply with the Commission's relevant directives and any relevant Guidelines of any Exchange, and ensure the use of Uneditable Back-Office Software supplied by the aforementioned panelized institutions by March 31, 2024;

Provided that, any TREC holder company that has been using its own developed Back-Office Software so far shall obtain a certificate from any Exchange by March 31, 2024, confirming compliance with the Commission's relevant directives and the Exchange's relevant Guidelines; otherwise, such companies shall purchase and install Uneditable Back-Office Software from a panelized Software Vendor of any Exchange and ensure the use of said Back-Office Software by March 31, 2024, in compliance with the Commission's relevant directives and any Exchange's relevant Guidelines;

Further provided that, Exchanges shall verify through random spot inspections whether TREC holder companies are using Uneditable Back-Office Software after March 31, 2024.

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Phone (PABX): +88-02-55007131-2, Fax: +88-02-55007106, Email: secbd@bdmail.net, Web: www.sec.gov.bd

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Bangladesh Securities and Exchange Commission
Securities Commission Building, E-6/C Agargaon, Sher-e-Bangla Nagar Administrative Area, Dhaka-1207, Bangladesh.

If any TREC holder company fails to do so at the Exchange, in addition to measures taken under existing Securities Laws against it, the Commission, exercising powers granted under Section 20A of The Securities and Exchange Ordinance, 1969, issues the following directives to the Dhaka Stock Exchange Limited, Chittagong Stock Exchange PLC, and Central Depository Bangladesh Limited, which shall take immediate effect;

(1) Free Limit benefits available under Regulation 3 of the Dhaka Stock Exchange (TREC Holder's Margin) Regulations, 2013 and Regulation 3 of the Chittagong Stock Exchange (TREC Holder's Margin) Regulations, 2013 shall be suspended; (2) Dividend payments payable against the ownership shares of the respective Exchange shall be suspended; (3) Benefits available for IPO/RPO/QIO as Eligible Investors/Qualified Investors Quota shall be suspended; and (4) Benefits for opening new branches or digital booths shall be suspended.

It is noted that the Commission's directive dated January 31, 2010, Ref No- SEC/CMRRCD/2009-193/11 is hereby repealed.

By Order of the Bangladesh Securities and Exchange Commission,

(Signature)
Professor Shibly Rubaiyat-ul-Islam
Chairman

Phone (PABX): +88-02-55007131-2, Fax: +88-02-55007106, Email: secbd@bdmail.net, Web: www.sec.gov.bd