FULCRUMS

Group-01

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

Automation in DSE and CSE

• DSE-

▫ 10th August 1998

• CSE-

▫ June 1998

▫ satellite based network connecting three major cities: Dhaka, Chittagong and Sylhet.

Timeline of Automation-

August 10, 1998Started

2001Introduced

TESA 2002Introduced

Indexes

2008, 2010, 2012

Hardware advanceme

nt

Comparison between MSA -TWS and MSA PLUS

Not Possible

No

Not available

Possible

Yes

Available for each instrument

MSA-TWS MSA PLUS

Internet Access

Instrument Graph

Number of work station

Work Base

Trader Restriction

Desktop Based

Limited

Web based

Limited

Why Automation?

Minimizing deficiencies

Increasing no. of real time transactions

Replicate and replace manual human tasks.

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. Design3. Decision Making4. Practice - Back-testing and paper trading are

essential to the successful development of a trading system:

5. Repeat6. Trade

Hardware Infrastructure

Distribution Network of Brokerage House

Past trading System of DSE & CSE

• Newspaper• Stock exchange notice boardInformation

• Available in companyApplication form

• Needed to submit in the respective company office along with the subscription money Submission

• NoLottery system

Past trading System of DSE & CSE

Specific place Visible SharesTrading was made

open cry-out system

Secondary Market

Difficulties of Cry-Out System and Need for

Automation:

Inept & slow down

Manual clearing system

Errors were difficult to

detect

Noisy

High dependence on

broker

Lack of floor knowledge

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

Present Automated Trading System of

DSE & CSE

Over Subscribed

Under Subscribed

Subscribed Fully

IPO Distribution System

Present Automated Trading System of

DSE & CSESecondary 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.

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.

Principal Functions of TESA-

• Market Information

• Order Management

• Order Execution

• Trade Reporting

• Index Calculation

• Market Access

Impact of Automated Trading System

• Transparency

• Trading time

increased

Impact of Automated Trading System

• Direct participation

by the investors

• Trading from

various area

Impact of Automated Trading System

• Reduction of Fake

Share Transaction

• Proper monitoring

Impact of Automated Trading System

in the Economy

• Expanding Capital Market

• Increasing Money Circulation

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

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

Central Depository Bangladesh

Limited (CDBL):

• Drawbacks of CDBL

▫ Increase in transaction cost

▫ Risk of stop trading

▫ Slow dematerialization rate

▫ Incomplete clearing system

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.

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.

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

THANK YOU