Bangladesh Bank initiated to automate the process of trading and settlement of Government securities transactions in October 2011. The secondary market of Government securities of Bangladesh is comprised of Over the Counter (OTC) and Trader Work Station (TWS). Both the procedure are the integral parts of Market Infrastructure Module (MI Module)-the automated auction and trading platform of government securities.
In OTC market participants are required to submit sale/buy order in the OTC platform while counter party conform the order. Once they complete the trading process and the system accepts trades, the data automatically flows to Core Banking System (CBS) for clearing and settlement of funds for completion of the settlement of funds in CBS. Further, the trading securities have been transferred automatically to the buyer securities account in MI.
Trader Work Station (TWS):
Bangladesh Bank has introduced the Trader Work Station (TWS)- an Order Matching system. The TWS is an electronic, screen based, order driven trading system for dealing in Government securities. In addition, the platform highlights the existing facility of Over-The-Counter (OTC) market in Government securities. Further, the TWS brings transparency in secondary market transactions in Government securities. Members can place bids (buy orders) and offers (sell orders) directly on the TWS screen. The system is order driven that matches all bids and offers focusing price/time. In particular, among the similar price orders, it matches the order on first come and first serve basis. The TWS facilitates Straight-Through-Processing (STP) system. In that system, trades that are automatically sent to the CBS for settlement.