Automation in the Dhaka and Chittagong stock exchanges began in 1998, replacing the manual cry-out system with electronic trading. This increased transparency, trading time, and direct investor participation. While automation improved market monitoring and reduced fake trades, it also increased transaction costs and regulatory challenges remain. Stock exchanges are now working to implement next-generation trading systems to facilitate modern equity trading.

1. FULCRUMS
Group-01

2. What is Automation?
Broadly we can say that which stock market book
entry, recording & maintaining, securities
accounts and reregistering transfer of securities
in electronic or automatic process that is
automation in stock exchange

3. Automation in DSE and CSE
• DSE-
▫ 10th August 1998
• CSE-
▫ June 1998
▫ satellite based network connecting three
major cities: Dhaka, Chittagong and Sylhet.

4. Timeline of Automation-
August
10, 1998
Started
2001
Introduced
TESA 2002
Introduced
Indexes
2008, 2010,
2012
Hardware
advanceme
nt

5. Comparison between MSA -TWS and MSA PLUS
MSA-TWS MSA PLUS
No
Not Possible
Limited
Not available
Yes
Possible
Limited
Available for each
instrument
Internet Access
Trader Restriction
Number of work
station
Work Base
Instrument Graph
Desktop Based
Web based

6. Why Automation?
Minimizing deficiencies
Increasing no. of real time
transactions
Replicate and replace manual
human tasks.

7. How to Implement the Automation
system-
The 6-Step System Construction is as follows –
1. Setup - To begin constructing a trading system you
will need several things:
▫ Data
▫ Software
2. Design
3. Decision Making
4. Practice - Back-testing and paper trading are
essential to the successful development of a trading
system:
5. Repeat
6. Trade

8. Hardware
Infrastructure
Distribution Network of
Brokerage House

9. Past trading System of DSE & CSE
• Newspaper
• Stock exchange notice board Information
Application form • Available in company
• Needed to submit in the respective company
office along with the subscription money Submission
Lottery system • No

10. Past trading System of DSE & CSE
Secondary
Market
Specific place Visible Shares
Trading was made
open cry-out
system

11. Difficulties of Cry-Out System and Need for
Automation:
Inept & slow
down
Manual clearing
system
Errors were
difficult to
detect
Noisy
Lack of floor
knowledge
High
dependence on
broker

12. Present Automated Trading System of DSE
& CSE
Collect B/O
account
opening form
Fill up & get
a certificate
from
manager of
bank account
Submit to
depository
participant
DP will input
data in
online server
of CDBL
CDBL will
generate a 16
digit account
number
IPO: Opening process of B/O Account

13. Present Automated Trading System of
DSE & CSE
IPO Distribution System
Over
Subscribed
Under
Subscribed
Subscribed
Fully

14. Present Automated Trading System of
DSE & CSE
Secondary market
• Contact with a stock broker/Brokerage House (Must
be member of DSE/CSE)
• Open a client account and a B/O account
• Observe first and study the market.
• Place your buy / sell order.
• Get buy / sell confirmation.
• You can hold it or sell it if price increases.
• If you hold it you may get cash dividend or stock
dividend.

15. Solution Benefits-
• Fault Tolerance: One of the most important
automation requirements for any stock exchange system
is continuous system availability. With most systems
Fault Tolerance is created at the application level. Fault
Tolerance is a fundamental design feature of the HP
Nonstop architecture.
• Data Integrity: Data integrity is an integral feature of
HP architecture. TESA employs standard HP tools to
achieve exceptional data integrity.
• Scalability: The ability of an exchange to accommodate
extraordinary increases in transaction volumes without
loss of its Capital investment in automation is very
important. The HP Nonstop Server is massively scalable
due to Parallel processors.

16. Principal Functions of TESA-
• Market
Information
• Order
Management
• Order Execution
• Trade Reporting
• Index Calculation
• Market Access

17. Impact of Automated Trading System
• Transparency
• Trading time
increased

18. Impact of Automated Trading System
• Direct participation
by the investors
• Trading from
various area

19. Impact of Automated Trading System
• Reduction of Fake
Share Transaction
• Proper monitoring

20. Impact of Automated Trading System
in the Economy
• Expanding Capital Market
• Increasing Money Circulation

21. Advantages of Automated Trading
Systems
• Minimize Emotions
• Ability to Back test
• Preserve Discipline
• Achieve Consistency
• Improved Order Entry Speed
• Diversify Trading
• Collecting Real-Time Market Information
• Collecting company Information
• Generating Market Statistics

22. Disadvantages and Realities of
Automated Trading Systems
• Mechanical failures
• Monitoring
• Over-optimization
• Forward Buy/Sell
• Lack of Knowledge
• Insufficient technical Expert
• Insufficient Law
• Insufficient Surveillances

23. Central Depository Bangladesh
Limited (CDBL):
• Drawbacks of CDBL
▫ Increase in transaction cost
▫ Risk of stop trading
▫ Slow dematerialization rate
▫ Incomplete clearing system

24. How Automation in Other Stock
Exchange
1# New York Stock Exchange
• Three bells System-
▫ The main bell, which is rung at the beginning and
end of the trading day, is controlled by a green
button.
▫ The second button, colored orange, activates a
single-stroke bell that is used to signal a moment
of silence.
▫ A third, red button controls a backup bell which is
used in case the main bell fails to ring.

25. How Automation in Other Stock
Exchange
2# Tokyo Stock Exchange
• Stocks listed on the TSE are separated into the
First Section for large companies, the Second
Section for mid-sized companies, and the
Mothers (Market of the high-growth and
emerging stocks) section for high-growth startup
companies.

26. Future plan- NGTS (Next Generation
Trading System)
• For smooth trading operation DSE is now under
process of introduce NGTS (Next Generation
Trading System) into the existing engine to
facilitate Equity market.
• Dhaka Stock Exchange is pleased to announce
that it has entered into agreements with
NASDAQ OMX and Flex Trade Systems to renew
its existing trading system

27. THANK YOU