BSEC to go tougher on delinquent brokers

The Bangladesh Securities and Exchange Commission (BSEC) will go tougher on brokerage houses that have a deficit in their consolidated customers account (CCA) in an effort to bring more discipline to the country's stock market.

The BSEC yesterday informed that the CCA of several brokerage houses are in a deficit, which goes against investors' interest as well as market regulations.

As such, it has already taken action against two brokers -- Dhanmondi Securities and PFI Securities -- for failing to comply with the related rules.

A CCA is an account held by a broker at any scheduled bank used for receiving investors' deposits for buying stocks and paying their earnings.

In its order, the BSEC said any brokerage with a deficit in its CCA will not be allowed to provide margin loans and will not be entitled to dividends from stock exchanges.

Additionally, the brokerage houses will not enjoy the quota for initial public offerings, repeat public offerings or qualified initial offerings.

Furthermore, the brokerage houses will not be allowed to renew their licenses or open any new branch, including digital booths.

The stock market regulator also informed that the stock exchanges will continue monitoring the brokers for at least two years, even after they adjust their CCA deficit to ensure compliance.

The country's bourses will check the CCAs at least twice a month, the BSEC said.

With regard to Dhanmondi Securities, the BSEC said it rejected the broker's application seeking more time to adjust its CCA.

Moreover, it will ask the Bangladesh Financial Intelligence Unit to suspend the bank and beneficiary owner accounts of the broker's directors and its managing director.

The same action will be taken against the directors and managing director of PFI Securities as it kept a deficit in its CCA for a long time, the BSEC added.