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