Central Depository System makes share trade look easy

HP 9000 risk processor7400 Enterprise Class Servers at the CDBL data centre. PHOTO: SK Enamul Haq

The Central Depository Bangladesh Limited (CDBL) operates the system that maintains the electronic book entry including investor services and facilitates secondary market trading of treasury bills and government bonds issued by Bangladesh Bank.

The CDS, which can be compared to a bank, keeps shares of shareholders in book entry form and acts like a bank of shares. So the delivery of shares in settlement of a transfer of shares executed between a seller and buyer can be easily achieved with change of records in the central depository instead of physical exchange of certificates.

The lengthy process of handling share transactions through handheld verifications also had risks associated with physical certificates such as fake or duplicate shares, protection against loss, mutilation or theft of share certificates. CDS has promoted the capital market with its fast and reliable service.

The participation of stock brokers/dealers, banks, financial institutions, insurance companies, statutory organisations, merchant bankers, asset managers, custodians, and other Securities and Exchange Commission (SEC) registered capital market intermediaries make the process of CDS transparent and reliable.

All physical certificates are converted into electronic accounting records as a record of ownership of securities. A shareholder can also open an account with a participant or CDBL to do this and can also convert it into the physical form through re-materialisation.

Technical operation of CDBL
The main data centre of CDBL has been deployed with HP 9000 risk processor7400 Enterprise Class Servers that maintain the database. HP Sure Store E Disk Array FC60 Controller which performs the read and write function and stores data. HP Sure Store E Digital Linear Tape (DLT) Library 4/40 Deskside is used for data backup regularly after daily operation. The library carries four magazines of what each contains 10 tapes of 40 gigabytes each. Along with these core technologies, additional equipments are also in operation such as tapes, shadows servers and DVD writers.

Two disaster recovery or Failover servers equipped with similar set of machineries are located at Grameen IT Park, Mirpur and CDBL's main office at Karwan Bazar. The Failover server at the main office is connected with the parent system through Ethernet, while the other one connects through radio link. Data is updated every 15 minutes via radio link using Cisco Aironet 350 devices.

Application software, VeDAS (Versatile Engine for Depository Accounting System), built on three-tier architecture, runs the CDS. The front end has been developed with Visual Basic while TUXEDO as the middle tier transaction manager and Oracle 8i as the back end centralises database.

CDBL is interlinked with Dhaka Stock Exchange (DSE) and its participants through Public Switched Telephone Network (PSTN). The investors in Chittagong Stock Exchange (CSE) and Syhlet communicate with brokers of the respective regions who then send the data to CSE and CSE Sylhet liaison office using PSTN.

For the operation of CDS, CDBL has established networks at Chittagong and Sylhet to transfer data to CSE Dhaka centre through Digital Data Network. The CSE Dhaka centre is connected with CDBL through long-reach Ethernet and it is also connected to the disaster recovery centre for data update through radio link.