The securities regulator has moved to reduce the bourses' trading cycle to T+1 from T+2 for 'A' and 'B' category issues to pave the way of offloading such securities after a day of purchasing the securities.
The Bangladesh Securities and Exchange Commission (BSEC) on Sunday asked both the bourses and depository authority to submit a detailed plan for executing the decision of introducing the T+1 trading cycle.
Asked, a BSEC official said the regulator has decided to reduce the trading cycle for 'A' and 'B' category securities to promote such good securities.
"Investors will be inspired to purchase good securities. The turnover will also be enhanced at this," said the BSEC official.
The former chairman of the securities regulator Faruq Ahmad Siddiqi said he is not in favour of reducing the trading cycle if the decision is executed targeting the turnover value only.
"Traders may like the reduced the trading cycle. Frequent changes including the revised limits of circuit breaker were done targeting the index and turnover. The market should be offered with a space of normal stabilisation," Mr. Siddiqi said.
He said the regulator should give concentration on long term measures along with containing manipulations without being worried about the market's ups and downs.
As per existing rules, T+2 trading cycle is applicable for the securities of 'A', 'B', 'G' and 'N' category securities.
On the other hand, T+9 trading cycle is applicable for 'Z' category securities.
Apart from 222 treasury bonds, 8 debentures and 8 corporate bonds, the number of listed securities is 385.
Of 385 listed securities, 264 are 'A' category and 89 are 'B' category. If the BSEC's decision regarding reducing trading cycle is executed, 253 listed securities of 'A' and 'B' category will be traded under T+1 trading cycle.
In a letter submitted to the managing directors of Dhaka Stock Exchange, Chittagong Stock Exchange and Central Depository Bangladesh Limited (CDBL), the BSEC asked them to submit their detailed plan within seven days of receiving the letter.
The BSEC has asked the bourses and the CDBL to provide their implementation roadmap with specific time slot for the activities including an amendment proposal to the relevant rules and regulations, system modification, user acceptance test and other necessary changes to execute the proposed settlement cycle.
