Guidelines for Capital Market Investment in Bangladesh through BRAC Bank Limited

Prepared for Non-Resident Bangladeshis (NRBs) & Foreign Investors

Bangladesh Capital Market

o Bangladesh Capital Market consists of the Dhaka Stock Exchange (DSE) & the
Chittagong Stock Exchange which were incorporated in 1954 & 1995 respectively.
o Both are members of South ASIAN Federation of Exchanges (SAFE), a forum in South
Asia to promote the development of securities markets in the region.
o The Securities & Exchange Commission (SEC) supervises activities of the bourses and
its members.
o Automated trading facilities available at both bourses since 1998.
o The Central Depository Bangladesh Limited (CDBL) introduced its first electronic book
entry in 2004.
o Market Intermediaries include 238 members of DSE, 135 members of CSE, 28 Full-
Fledged Merchant Banks, 6 Asset Management Companies and 5 Custodians6 (Six)
Bangladeshi Companies have been added to Dow Jones Safe-100 Index.

Why should you invest in Bangladesh Capital Market?

o 100% repatriation of capital, dividend and investment profits.

o Reinvestment of repatriable dividend treated as new investment.
o No tax on capital gains
o 10% of all IPOs are reserved for NRBs.
o World’s Bank Investor Protection Ranking for Bangladesh 19th, Pakistan 25th, India 38th
& Sri Lanka 70th.
o Bangladesh was considered as one of the Goldman Sachs Next 11 countries for a high
potential of becoming the world’s largest economies in the 21st century along with the
BRICs (Brazil, Russia, India and China).
o Easy access to ownership of Infrastructure Development companies, high net worth
private banks and companies through Capital Market.

Requirements for NRBs & Foreign Investors to invest in Bangladesh

o A Foreign Currency (FC) Account is needed for inward and outward remittance.
o A Non-resident Investor’s Taka Account (NITA) is required for converting foreign
currency into Taka.
o All Capital Market investors are required to conduct trading through a Stock Broking
Account
o maintained with any Stock Broker/Member of the respective Stock Exchange.
o In order to trade dematerialized shares listed with the Stock Exchanges, investors must
have a Beneficiary Owners (BO) Account with CDBL.
o NRB & Foreign Investors may choose to appoint a Custodian to ensure trade execution
and safe custody of shares.
Why NITA & Stock Broking Accounts

According to Chapter 14 9Sec-1 of Vol-1) of the Bangladesh Bank’s Foreign Exchange

Transaction Regulations, 1947:
o Non-resident persons/institutions including NRBs may buy securities in Bangladesh
against freely convertible foreign currency remitted from abroad through the banking
channel.
o Non-resident investors shall open a NITA with any Authorized Dealer (AD) in
Bangladesh (i.e. an authorized commercial bank/ bank branch)
o Balances in NITA may freely be used to buy Bangladeshi shares and such balance
including dividend and sale proceeds is freely remittable abroad in equivalent foreign
exchange.
o Purchase and sale of shares listed in Bangladesh Stock Exchanges shall be made only
through a member /registered broker of the Stock Exchange & purchase of new public
issues not yet listed with the stock exchange may be made directly from the issuing
company.
o No local funds except dividend/interest earning on securities, share sale proceeds &
freely
o convertible foreign currency remitted from abroad can be credited to NITA.
o No loan facilities shall be allowed in NITA.

How to invest through a Custodian in Bangladesh?

o Open a FC account and NITA with any AD of the Bangladesh Bank.

o Open a Custodian Account with any of the SEC registered Securities Custodian.
o Your Custodian will open a Stock Broking Account with any member of the Stock
Exchange.
o Custodian will act as an Operator of your Stock Broking Account.
o The Custodian will also open a BO Account with CDBL in order to trade dematerialized
shares and act as a POA to your BO Account.
o Remit foreign currency in the local FC Account from abroad with instruction to the
Custodian for crediting NITA.
o The Custodian will arrange payment to the member for crediting Stock Broking Account.
o Send securities trading instruction to your Custodian through e-mail or fax.
o Receive securities transaction statement through e-mail or fax from your Custodian.
o Instruct your Custodian for remitting fund from Bangladesh to you.
o You can open FC Account, NITA, BO Account & Custodian Account with the same bank
and your Stock Broking Account can be opened at the same place provided the bank
has Custodian license, Subsidiary Brokerage & Authorized Dealership for one-stop
solution.
Why BRAC Bank Limited?
Being your One-Stop Capital Market service provider, you can avail the following services from
BRAC Bank Limited under One-Umbrella:
1. NITA & FC Account opening
2. Stock Broking Account opening through its subsidiary BRAC EPL Stock Brokerage Ltd.
3. BO Account opening
4. Custodian Account opening
Document Checklists

Required documents for NRBs Foreign Nationals Foreign Institutions

NITA and FC A/C
Photocopy of passport Bangladeshi Foreign Passport Passport of the CEO
Passport
Photographs (Account 4 copies PP size 4 copies PP size 4 copies PP size
holder) (Attested by (Attested by photos of all
introducer) introducer) signatories &
authorized persons
Photographs (Nominee) 2 copies PP size 2 copies PP Not Applicable
(Attested by (Attested by
Account holder) Account holder)
Employee Statement/ Required Required Not Applicable
Business Document
Resident Permit Required Not Applicable Not Applicable
Memorandum &article of Not Applicable Not Applicable Required
Association, Tax Certificate
& Trade License
Approval from the Board of Not Applicable Not Applicable Required
Directors for Investment &
Authorized Person, if any

Required documents NRBs Foreign Nationals Foreign

for Stock Broking and Institutions
BO A/C
Approval from the Not Applicable Not Applicable Required
Board of Directors
for Investment &
Authorized Person

Photocopy of Passport Bangladeshi passport Foreign Passport Passport of the

(with valid visa), Authorized person
Foreign passport (with
no obligations seal
from Bangladesh
Embassy)
Photographs (Account 3 copies PP size 3 copies PP size Not Applicable
holder) (Attested (Attested by
by introducer) introducer)

Photographs 2 copies (Attested by 2 copies (Attested by 3 copies PP size

(Authorized Person) Account holder) Account holder)

Power of Attorney Required (2 copies PP Not required Not required

(Photographs of POA) size Attested by
Account holder)
Photographs 1 copy PP size 1 copy PP size Not Applicable
(Nominee) (Attested by Account (Attested by Account
holder) holder)

Bank A/c number FC account FC account & NITA FC account &

certificate/statement NITA

Memorandum & Article Not Applicable Not Applicable Required

of Association

Required NRBs Foreign Nationals Foreign Institutions

documents for
Custodian A/C
Approval from the Not Applicable Not Applicable Required
Board of Directors
for Investment &
Authorized Person

Photocopy of Bangladeshi passport Foreign Passport Passport of the

Passport Authorized person

Photographs (Account 3 copies pp size 3 copies pp size Not Applicable

holder)

Photographs 2 Copies pp size 2 Copies pp size 3 copies pp size

(Authorized person) (attested by account (attested by account (authorized person by
holder) holder) board)

Photographs 1 copy PP size 1 copy PP size Not Applicable

(Nominee) (Attested by Account (Attested by Account
holder) holder)

Bank A/C No. FC account & NITA FC account & NITA FC account & NITA
Certificate/Statement

Memorandum & Not Applicable Not Applicable Required

Article of
Association

Work Permit Required Not Applicable Not Applicable

Contact Information

There is a designated team for providing share dealing services NRB and Foreign Investors in
BRAC Bank Limited. Please call our 24 hours phone banking number 01819230000 or write to
us at probashi@bracbank.com
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