Upload
rudolf-ball
View
219
Download
0
Tags:
Embed Size (px)
Citation preview
Group Members1. Morjina Sultana ID-170
2.Nargis Akhter ID-1233.Zinia Akhter ID-132
10.Saima Sadiah ID-162
9.Afroza Akhtar ID-144
4.Sifat Ara Bashar ID-135
5.Rashida Ahsana ID-156
6.Afroja Begum ID-95
7.Farhana Yesmin ID-167
8.Mollika Akter ID-114
Definition of brokerage house
A brokerage house is party that arranges transaction between a buyer and a seller, and gets a commission when the deal is executed.
A brokerage house who also acts as a seller or as a buyer becomes a principal party to the deal.
Distinguish agent:-one who acts on behalf of a principal.
History of brokerage house….During the 11th century ,the French began
regulating and trading agricultural debts on behalf of the banking community creating the first brokerage system.
In 1300s , houses began to be set up in the major cities like Flanders and Amsterdam.
In 1602 the Dutch east India company became the first publicly traded company .
The early twenty first century saw a rise of online trading.
But the earliest brokerage firms were established in London coffee houses, enabling individuals to purchase stocks from a variety of organizations . They formally founded the London stock exchange in 1801.
Soon the US exchange was moved to New York city and various firm like Merrill Lynch was created to assist in the brokering of stocks and securities.
History of brokerage house inside Bangladesh.Listing of small number of companies after the
establishment of DSE ltd. in 1964.Government initiative after liberation war.Cry out system-which was prevailed until 1996 when
the share market collapsed.Abomination of cry out system and installation of fully
automated computerized system on 10th august 1998.Implemented broker control over trader in 2001.Implemented broker control over client in 2005.Implemented ACS system in April 2006.In June 2009 developed secured broker network with
DSE.
Brokerage firm can be classified as:-
Brokerage firm
Full service
Online investing
Deep discount
Discount
1) full service brokerage firm:- they offer the most services but commission and fees are the
highest. They are known for their extensive research, exclusive advice, as well as a full range of other financial services.
2)Discount firm:-they offer some services such as demitted advice and research. However, they may change a minimum fee on all trades.
3)Deep discount firm:-they offer little other than a way to trade and some customer service. They offer low on no minimum fees too.
4)Online investing:-it requires both the investors to be comfortable with using computer and to have access to a reliable internet connection.
How to choose stock brokerage firmsHow much money you have to investLevel of knowledge in stock investingNumber of tradesKind of servicesHow comfortable are you using a computer
and do you have access to reliable internet network.
Stock broking servicesThey are three types:-1) Execution only:-broker will only carry out
the clients institution to buy a sell.2) Advisory dealing:-broker advices the clients
on which shares to buy and sell.3) Discretionary dealing:-broker ascertain the
clients investment objectives and then make all dealing decisions on the clients behalf.
Screened Based Trading System
The advancement of ICT.
An advanced trading system over the cry out market.
Dematerialized shares.
Upgraded client part application software.
Central depository reserve.
BO account.
3.5 Trading Screen:
Benefits of MSA plus increase of brokerage house
InvestorEmpowerment of the brokerage houseNumber of per trader terminalIntra day instrument graphDetermination of value limitAPISome terminal and stationReduction of the load on the networkCentral depository system
What is a BO account?
This is the account that holds your shares like an inbox holding all your emails
How to open a BO account to involve in share business:
Step-1:open an account at bankStep-2:select a suitable stock broker or brokerage
house.Step-3:collect a BO account opening form.Step-4:documents needed to open a BO account.
a) If you are an individual applicant:-
1)two copies of passport size photograph 2)National ID card or photocopy of passport or bank
statement or driving license or nationality certificate, two copies of passport size photograph of nominees.
b) Joint applicant: same as individual applicant.
c)Sole trader/proprietor:-1)Trade license d)Partnership1)Partnership agreement or resolution of partners to
operate the BO account.e)Corporate Account:-1)Photographs of the directors.2)Photocopy of national id card or photocopy of
passport/driving license/nationality certificate.3)Board resolution4)Memorandum and articles of association.5)Signature and photograph of the authorized person if
any.Step-5:-Submit the documents with account opening fee
to the brokerage house.Step-6:-Account will be opened within 3 days to 1
month.
From where should an NRB open his accounts? Home and Abroad!Home Abroad Its easiest if the NRB is in
Bangladesh to open the BO account for investment .
Then the NRB can go to abroad and continue applying for IPO’s and trading in the secondary market.
Very soon investors will be able to buy/sell orders so their brokers online.
Collect the relevant forms from your preferred brokerage house via mail.
Fill it and send the forms back to the brokerage house with the Nominee and the POA part filled in and send the POA to the brokerage house.
Very soon investors will be able to place orders to their brokers online.
What are the Benefits of NRB?
10% of all issued IPO are reserved for NRB.
No capital n0 tax.Minimum 60% of NRB Mutual Funds are
reserved for NRB.Individual Income Tax will not be more than
15%.Can also trade in the secondary capital
market while abroad through Nominee in local currency.
A Foreign Investor
A foreigner residing in Bangladesh or abroad willing to invest in Bangladesh
Capital Market are considered as foreign investor.
How to start?
1. Open NITA Account with AD.
2. Select custodian in Bangladesh.
3. Open BO through custodian.
4. Open trading Account with
preferred broker.
Start Trading
The flow of investment activity:
Foreign Investor
Fund Manager
International Broker
BO with CDBL Local stock Exchange
Local Broker
Local Custodian
Global custodian
NITA Account
Non -resident Investment Taka Account
An Account for channeling foreign currency as well as repatriation or
earnings from investment.
Foreign Investor
Buy Order
SWIFT
BrokerCustodianConfirm fund
BO
Electronic share
Payment
Broker BOElectronic
share
Payment
Place order
Trading system of exchange
Foreign Investor
Custodian
BO/omnibus BO
Electronic share
Broker
Sell Order
Confirm share availability
after execution
Sale proceed advanced
Sale proceed
Electronic share
Trading system of exchange
Place order
Broker BO
CDBLCDBL was incorporated as a public limited
company on 20th August 2000 to operate and maintain the central depository system (CDS)
What is CDS? CDS is an electronic book entry
system to record and transfer securities electronically without having any physical movement or endorsement of certificates.
The services of CDBL:-
Participants of CDBL
1 .stock brokers 2 .Banks 3. Financial institutions 4. Insurance company 5. Merchant bankers 6. Asset managers 7. custodians 8. any other capital market inter mediaries registered with SEC
Earnings of a brokerage houseCommission A brokerage commission is a fee paid to a
stock broker by a client for the purchasing or selling of shares in the stock market.
The prescribed commission rate is 0.25% usually a brokerage commission is calculated
as a percentage of the total transaction.
Total Transaction= Total Buy + Total Sell.
Beside commission-some brokerages offer advisory and portfolio management services.
The fee paid for such services should not be confused with a brokerage commission. The brokerage commission covers expenses for the brokerage such as-
- transaction fee paid to the stock exchange
-order handling fees etc.
Loan
Current loan margin is 1:2Omnibus account -an omnibus account is formed when a
brokerage firm groups together individual accounts to form a unified account at any financial organization like bank.
-typically the financial organization carrying the omnibus account views the account as a single client and the company does not require gather or retain information about the individual accounts that make up the omnibus account.
Some differences:
Between:
Broker and Underwriter
Broker and Agent
Broker and Jobbers
Dealer and Broker
Brokers buy or sells things for people.Underwriters underwrites insurance policies
especially for ships.
Broker, as a agent, is a broader term. While an agent has the power and authority to act on
ones behalf, a broker is ones agent,
Broker is a retailer.Jobber is a wholesaler.
Broker trade security on his clients behalf.Dealer trade securities for his account.
Some brokerage house & Head Offices:
A.B,ISPAHANI SECURITIES LTD.Ispahani building(2nd floor),
Motijheel C/A, Dhaka.
A.K. KHAN SECYRITIES LTD.Uday tower(9th floor),Gulshan-1, Dhaka.
A.L. SECURITIES LTD.Modhumita building(6th floor),
Motijheel, Dhaka.
A.M. SECURITIES LTD.111, Bir Uttam C.R Datta
road,Dhaka.A.R. CHOWDHURY SECURITIES
LTD.Stock exchange building,9/f,
Motijheel, Dhaka.
AB & COMPANY LTD. Room;505, 9/f, Motijheel, Dhaka.
AB SECURITIES LTD. WW tower(6th floor),68, Motijheel, Dhaka.
ABDUL HYE.Gulshan Model town, Dhaka.R
A.B.S. SAFDAR & CO. LTD.DSE anex building, Motijhel, Dhaka.
ACE CAPITAL MANAGEMENT SERVICE LTD.
Ellal chamber, 11 Motijheel, Dhaka.
Brokerage Operation
Instrumental operation Transactional Operation
Trading
Client order
Buy Sale
Assessment of purchase power from
portfolio
Assessment of saleable quantity
from portfolioOrder
submission on TESA/VECTOR
Execution Documentati
on
Buy
Sell
Trade confirmation
Filling up buy-sell order form
Settlement
Stock Money