The Bangladesh Securities and Trade Commission (BSEC) has suggested inventory exchanges to construct a uniform on-line platform where inventory brokers can update their Consolidated Customers’ Accounts (CCA) establish on every day foundation at the conclude of trading hours.
The directive became issued to both the Dhaka Stock Trade (DSE) and the Chittagong Stock Trade (CSE) this day.
A Consolidated Customers’ Chronicle (CCA) is a separate checking yarn maintained by stockbrokers to withhold unused funds from their purchasers’ beneficiary proprietor (BO) accounts.
These funds are strictly to be frail simplest for paying for securities purchased by the shopper or collecting commissions or charges owed by the shopper. Any unauthorized boom of the funds from the CCA results in a deficit.
To toughen transparency and accountability, both exchanges will get this unified platform for CCA updates. Brokerage firms will doubtless be required to update their CCA establish on every day foundation thru the platform.
The inventory exchanges will video show the CCA establish ceaselessly, and if discrepancies are discovered, they’re going to take appropriate motion.
As segment of this initiative, the inventory exchanges could also secret agent the CCA calculation formulation and construct a standardized layout for CCA calculations. These paperwork ought to be submitted to the BSEC, and the standardised layout will doubtless be printed on the legitimate internet sites of both exchanges.
The commission has also suggested inventory exchanges to evaluate the recent documentation job for the renewal of inventory vendor and inventory dealer registration certificates. The inventory exchanges will put up a particular proposal to the commission to streamline the renewal job of brokerage firms.
The BSEC has asked for a standing document on the growth of implementing these instructions, alongside with supporting paperwork, to be submitted within 15 days.
High officials from both inventory exchanges, talking anonymously with TBS, expressed issues in regards to the challenges of providing an factual CCA establish in a immediate whereas frame.
They explained that bank transactions are thinking about CCA establish updates, and a few bank cheques also can simply not be cleared on time, making it unheard of for brokerage firms to present factual CCA figures.
The inventory exchanges opinion to focus on about these disorders with the commission on Tuesday, alongside with methods to streamline the renewal job for brokerage firms.
Presently, inventory brokers and inventory sellers be aware to the inventory alternate for a renewal certificates. After acquiring consent from the inventory alternate, they search approval from the BSEC.
Once regulatory consent is granted, the inventory alternate disorders the renewal certificates. Alternatively, this job is assumed to be time-sharp and more unheard of than mandatory.
What actions BSEC take in case of a deficit in CCA
If the BSEC identifies any deficit in a brokerage agency’s CCA, the regulator can suspend all quota companies and products for that agency.
At some level of such suspensions, the brokerage agency loses several privileges, together with get entry to to free restrict companies and products offered by the inventory exchanges, eligibility for Initial Public Providing (IPO) quotas as a qualified investor, and dividend rights as a inventory alternate member.
Furthermore, the agency is illegal from opening digital booths or branches until compliance is restored. If the brokerage agency fails to certain renowned dues, its renewal of the depository participant license could also be suspended.
Earlier, five assorted brokerage firms embezzled approximately Tk460 crore of patrons’ money, in accordance with experiences from the inventory exchanges.
Just not too lengthy within the past, Moshihor Securities Ltd became discovered to have misappropriated purchasers’ funds invested within the capital market for years by evading regulatory oversight thru the boom of a pair of servers and databases.
In step with a letter from the DSE to the securities regulator, Moshihor Securities embezzled a total of Tk161 crore, together with Tk68.58 crore of patrons’ money and Tk92.35 crore of patrons’ shares. In consequence, the BSEC suspended all companies and products for the agency as a result of deficit.
Equally, Tamha Securities misappropriated Tk139.67 crore by illegally the usage of extra software program and providing false knowledge to purchasers about their investment establish. Of this, Tk92.57 crore became in money, and Tk47 crore in securities.
In June 2021, the DSE suspended the trading of Banco Securities after it became discovered to have embezzled Tk60 crore. The DSE discovered a deficit of Tk128 crore in Banco’s CCA, together with Tk66.11 crore in money and Tk61.97 crore in securities.
Crest Securities with out note closed its operations and shut down its location of enterprise with out prior discover. The DSE discovered a deficit of Tk65.30 crore within the firm’s CCA, together with Tk44.90 crore in money and Tk20.40 crore in securities.
Shah Mohammad Sagir & Company became also suspended for failing to resolve trades after embezzling Tk13.74 crore.
