You have to open a bank account in any public or private bank in order to open a BO account in Bangladesh. Then you need to find out a suitable brokerage house. Later, you can open a BO account to start share investing. If you are new in stock investing, you should read stock market basic knowledge.
What is BO?
Beneficiary Ownership (BO) is a unique account that is similar to bank an account. This account is used for identity purpose. In Bangladesh, BO is 16 digits number. At present, Bangladesh has 2,066,952 active BO account, according to Central Depository Bangladesh Limited (CDBL). After getting the BO number, you will get a client code from your brokerage house to start investing in stock market.
What is Client Code?
Like BO number, Client Code is some digits that are given by brokerage house. Client Code is unique in your brokerage house, which is used for identifying clients. If you switch current brokerage house, your Client Code will change according to new brokerage house coding system.
But your BO account will remain the same. For example, Langkabangla Securities Limited- a brokerage house in Bangladesh- provides Client Code like this C10000 (first one is a letter and then 5 digits).
How to open BO account?
You can open BO account in two ways: through directly CDBL or a brokerage house. I suggest you to open a BO account through a brokerage house. You will get enough support from your selected brokerage house if you open the account by them. You can apply online or offline application process.
In order to open a BO account, you have to pay 450 tk fee. Your broker will charge extra 50 tk as service charge to open BO account by them. So, you need 500 tk to get a BO number.
Procedures for BO opening
Go to DSE website to see the list of listed brokerage houses. Then visit some brokerage houses’ website. Learn about their services. Select a best brokerage house. Apply online or offline. For offline, you need to fill-up a physical form and submit required documents.
How to apply for BO account?
1. Choose a best brokerage house.
2. Collect designated application form from your selected brokerage house branch.
3. You can apply through online or offline. Better to apply offline.
4. Have to submit your and your nominee NID card’s photocopy.
5. Have to submit passport size 2/3 photos both for you and your nominee.
6. Have to submit a photocopy of blank cheque.
7. Deposit application fee 450-500 tk.
That’s all. When your application is completed, you have to wait some time to get the notification of BO number.
How to get Client Code?
When you get BO number, your broker agent will send you a Client Code and one-time password via Email. You should change password immediately after getting the one-time password and log in ID.
How to use DSE mobile app?
If you select Dhaka Stock Exchange for investing, you can use DSE mobile app for real time trading. First of all, download the mobile app from play store. After installing the app, inform your broker to send you a one-time password and log in information.
When you receive log in information via Email, you should set a new password. Client Code and a password are used for log in DSE mobile app. Now time to put buy and sell order.
How to choose a Cost-Effective brokerage house?
You should choose a cost-effective brokerage house so that you can reduce transaction cost. From brokerage house, you deserve at least two services: low commission rate and real time customer support. In Bangladesh, commission rate varies from 0.25% to 1%.
You can trade frequently in case you choose low commission rate brokerage house. So, read term and conditions before select a brokerage house.
Let’s see an example how commission rate works
Suppose, a broker house’s commission rate is 0.25%. You need to pay buying commission at the rate of 0.25% and selling commission at the rate of 0.25%. If you calculate buying and selling commission rate, total commission rate is at least 0.5%. Your broker will charge both buying and selling commission whether you gain or loss.
In Conclusion
Opening a BO account is the first step to start stock investing. You can follow almost similar bank account opening procedure in order to open a BO account. Just talk with a brokerage house and submit aforementioned documents. They will do everything on behalf of you. I hope you have learnt how to open a BO account in Bangladesh.
Founder of The Financial Ask
