Transaction fee of block trade, report crossing, DVP revised

The premier bourse Tuesday revised transaction fee of block trade, report crossing and the delivery versus payment (DVP) in an effort to boost market liquidity through more bulk transactions, officials said.

Presently, transaction fee is imposed for all kinds of trade at a flat rate of 0.03 per cent.  

As per the decision taken at a board meeting of the Dhaka Stock Exchange (DSE), 0.0125 per cent transaction fee will be applicable if the transaction of shares worth above Tk 5.0 million is executed once through block trade, report crossing and delivery versus payment (DVP).

DSE managing director Dr. Swapan Kumar Bala said the premier bourse has slapped a fee of 0.0125 per cent following the demand of institutional investors.

"Costing of institutional investors will be reduced significantly if they execute bulk transaction. It will also boost the liquidity in the capital market," Mr. Bala said.

The DSE authority has also reduced other transaction fee to 0.025 per cent from the existing 0.03 per cent.

As per the DSE board decision, the revised transaction fee will be considered effective from January 1, 2015.

In the country's capital market, block trade involves a significantly large number of shares or bonds worth above Tk 5.0 traded between the parties, outside of the open markets, in order to lessen the impact of such a large trade on the market.

Transaction of the securities held by institutional investors executed through same broker is termed as report crossing.

On the other hand, the DVP involves the transfers of securities among institutional and foreign portfolio investors. In case of such transaction, minimum one party of buyer or seller must be foreign portfolio investors.

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