The securities regulator has revised the margin loan limit announced recently based on the movement of the broad index of Dhaka Stock Exchange (DSE).
The Bangladesh Securities and Exchange Commission (BSEC) also said the revised margin loan limit will come into effect from January 1, 2021, according to an official satement posted on the DSE website Tuesday.
As per the revised limit, the margin loan will now be distributed at a ratio of 1:0.75 if the DSE broad index DSEX stays below 4,000 points.
The margin loan ratio will be 1:0.50 if the DSEX remains between 4,001 points and 7,000 points.
And the ratio will be 1:0.25 if the DSEX is 7001 points or above.
“TREC (trading right entitle certificate) holders of the stock exchanges will extend maximum limit of credit facilities to their approved clients in the following manner under the Margin Rules, 1999 until further order,” said the statement.
The securities regulator has revised the maximum limit of margin loans cancelling the previous directive issued on September 21.
As per ratio announced on September 21, margin loan was supposed to be distributed at a ratio of 1:1 if the DSEX exists below 4,000 points.
The BSEC had said the margin loan ratio will be 1:0.75 if the DSEX remains between 4,001 points and 5,000, while the ratio will be 1:0.50 if the DSEX is between 5,001 points and 6,000 points and 1:0.25 if the index goes beyond 6,000 points.
