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Settlement Process

Steps of Foreign Trading in Bangladesh

  1.   The Foreign individual investor (Investor) has to open a trading account with a Broker and a custody account with a Custodian Bank.
  2.   The Investor shall transfer adequate funds to the Custodian Bank.
  3.   Investor will provide ‘Buy Order’ or “Sale Order” to the Broker.
  4.   After receiving the order (s), the Broker will verify funds availability with the Custodian.
  5.   The Broker will execute the deal through the exchange, usually under Receive Against Payment (RVP) Format.
  6.   After execution, the Broker will send a Trade Confirmation Note (TCN) to the Custodian and also to the Investor.
  7.   The Investor, after verifying the TCN, will instruct the Custodian through fax to settle the trade.
  8.   However, the original instruction has to reach the Custodian later.
  9.   The Custodian will verify the TCN with Investor’s instructions.
  10.   The Broker will transfer fund/shares to the Custodian.
  11.   The Custodian will transfer the fund/securities to the Broker’s cash account (for fund) or clearing account (for securities).
  12.   The Custodian will repatriate the sale proceeds through Bangladesh Bank (Central Bank) as investment return.