DSE voices concerns over CCBL procurements ahead of operations launch

The Dhaka Stock Exchange (DSE), which holds a 45 per cent stake in Central Counterparty Bangladesh Limited (CCBL), has raised concerns about CCBL making significant procurements as it approaches the launch of its major operations.

The DSE’s concerns are focused on cost implications and potential risks associated with these procurements.

Established in 2019, CCBL aims to modernise the infrastructure of Bangladesh’s capital market by introducing derivative products and advanced clearing and settlement systems.

DSE Chairman Mr Mominul Islam sent a letter on December 10, 2024 (Tuesday last), to the Chairman of CCBL, requesting a temporary suspension of procurement activities.

In the letter, the DSE expressed concerns that CCBL has failed to safeguard the country's best interests by exposing critical technology to external vulnerabilities and being slow in implementing key decisions.

The DSE also requested that CCBL refrain from acquiring additional IT facilities for settlement, suggesting instead that CCBL utilise the existing DSE infrastructure.

Furthermore, the DSE criticized CCBL for a lack of communication and interaction, noting that CCBL has not shared any financial statements with the DSE.

A major broker, speaking on condition of anonymity, informed the Financial Express (FE) that CCBL is subscribing to software from India, which they consider risky. The broker further noted that CCBL plans to purchase new infrastructure for its data center, despite the fact that the DSE already has this infrastructure available. Brokers, who are the primary users of this software, have expressed concerns that CCBL did not consult them before making this decision.

However, CCBL officials have denied these claims. A high-ranking CCBL official, also speaking anonymously, explained the delay, stating that they are merely implementing DSE's decisions, not their own.

The official argued that sharing hardware with DSE would pose additional risks, as a DSE downtime would also affect CCBL. They also emphasised that, like many others in the country, they have opted to subscribe to software from abroad. The official further pointed out that DSE has two representatives on CCBL's board and that no decisions have been made without their input. "We respect any concerns from our directors and will address DSE's letter accordingly," the official added.

DSE holds a 45 per cent stake in CCBL, while the remaining 55 per cent is owned by the Chittagong Stock Exchange (CSE), CDBL, and twelve banks. In the letter, the DSE Chairman requested an urgent meeting between the boards of CCBL and DSE to review the situation at a policy level, followed by the formation of a Joint Commission at the operational level. DSE also requested a halt on any procurement process, particularly those with an annual value exceeding BDT 10 million, for the next six months to allow time to determine the best course of action.

CCBL was established with the goal of selecting and implementing a CCP system that meets global standards, supporting the development of equity, debt, derivative products, risk management, and clearing and settlement operations to ensure the smooth operation of Bangladesh’s capital market.

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