10 brokers to give clients direct access to trading platform

Mohammad mufazzal | Published: August 24, 2023 21:45:13

Ten brokerage firms formed a consortium to install their own order management system (OMS) in January to expedite transactions.
They will receive technical support from a Dubai-based IT firm namely SK Advisory FZ LLC. The consortium, Xpert Fintech Ltd signed an agreement with the IT firm in Dubai on Wednesday, according to a press release.
When the system will get operational in January, clients of the brokers will have direct access to an automated trading platform for executing transactions with the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE).
The brokerage firms that have been working on this together are EBL Securities, Bank Asia Securities, Shahjalal Islami Bank Securities, One Bank Securities, Islami Bank Securities, Green Delta Securities, National life Insurance Securities, Apex Securities, Monarch Holdings, and UCB Stock Brokerage.
After installation of the OMS of the consortium, clients of the brokerage firms will be able to trade at a faster pace from home, said Chief Executive Officer of EBL Securities Md. Sayadue Rahman.
Presently, all but five brokerage firms carry out transactions depending on order management systems of the DSE and the CSE.
Too many orders placed by brokerage firms at a time overload the systems deployed by the exchanges, leading to technical disruptions.
Technical problems could be averted if brokerage firms had their own OMS.
Earlier, the securities regulator and both the stock exchanges urged stock brokers to introduce their own OMS through API (Application Programming Interface) connection.
In many other countries, brokerage firms operate relying on their OMS.
However, having individual OMS involves a huge cost, which is why the firms came together to reduce the cost burden.
It will take around Tk 30 million to get the services, said Mr Rahman. Some other brokers will gradually be allowed to be linked to the system at affordable costs and enjoy the advantages, he added.
Meanwhile, five brokerage firms -- LankaBangla Securities, City Brokerage, Shanta Securities, First Capital, and United Financial Services - have been reaping benefits of having separate OMS.
Some other firms, including IDLC Securities, have also been working to put in place a separate order management system.
Advantages
Apart from resolving technical issues, brokers say separate OMS will help curb mismanagement.
For example, traders often place buy-sell orders without the consent of clients. Such practices will decline if clients get direct access to an automated trading platform.
Investors make fewer complaints when trading is done through the broker's OMS, said Saffat Reza, chief executive officer of LankaBangla Securities.
On the financial benefits of brokers, Mr. Reza said OMS helped expand business as the intermediaries could cater to the need of more clients.
"Returns get higher for trading by more clients even though transaction fees remain the same."
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