The securities regulator Monday asked nine brokerages to suspend their 15 trading operators for executing their clients' sale orders sans mentioning any market price of the securities--at a time when bourses suffer volatility.
In an order, officials said, the Bangladesh Securities and Exchange Commission (BSEC) asked the brokerage firms to act against the trading operators who are also called authorised representatives.
As per the regulatory order, those nine brokerage firms should suspend their authorised representatives if their explanations do not stand a close scrutiny.
ICB Securities Trading Company is to act against five such representatives while two representatives each have to be suspended by Rashid Investment Services and Shyamol Equity Management.
Besides, one representative will be suspended by each of the brokerage firms namely Parkway Securities, Quayum Securities, Mercantile Bank Securities, TA Khan Securities Company, JKC Securities and Kazi Equities.
"At the very beginning of the day's trading session, we identified 15 authorised representatives who executed sale orders without mentioning prices," said Shaih Shamsuddin Ahmed, a BSEC commissioner.
He said they executed sale orders without mentioning market prices at such a time when the market has been witnessing a downturn.
"Such activities affect the market badly and it's a clear violation of rules. In future, we will shut down the brokerage firms which will be found responsible for influencing the market with bad intensions," said the BSEC commissioner, Mr. Ahmed, to send in a strong message for any suspected manipulators.
According to BSEC officials, those 15 representatives have executed sale orders of the shares of Beximco Pharmaceuticals, Square Pharmaceuticals, Beacon Pharmaceuticals, the Investment Corporation of Bangladesh (ICB), LafargeHolcim Bangladesh, British American Tobacco Bangladesh Company, Nitol Insurance Company, Green Delta Insurance and Olympic Industries at market prices or zero-rated prices.
As per the rules, authorised representatives execute sale or buy orders in line with their clients' instructions.
The DSE officials said their automated Order Management System (OMS) has an option of executing sale or buy orders without mentioning prices. In that case, the traders place only the amount of securities without mentioning the prices at which their clients want to buy or sell shares.
The highest price placed by another investor will be the best price or touch line price for a seller and similarly the lowest price offered to sell shares will be the best price for a buyer.
The officials said in case of placing buy or sale orders at market prices, the traders only place the quantity of shares that their clients want to buy or sell.
And a client's sale or buy order will be executed at the best prices if the seller's quantity of shares matches with the buyer's quantity of shares.
Asked, Md. Taleb Hossain, the ICB Securities Trading Company's chief executive officer (additional charge), said their authorised representatives placed the sale orders in line with the instructions of clients.
"The sale orders were placed below the closing prices of the previous session," Mr. Hossain added.
He made it clear that the intensions of traders can come under the scanner if a large number of sale orders of large companies are placed to influence the market negatively.
In this regard, the BSEC executive director and spokesperson Mohammad Rezaul Karim said the code of conduct of the authorized representatives does not allow them to execute orders at a zero price.
Asked, managing director of Shyamol Equity Management Md. Sajedul Islam said they were yet to identify such incident.
"We have not yet found the computer from where the sales orders were placed at zero prices," Mr. Islam said.
Asked about the matter, an official of Dhaka Stock Exchange (DSE) said there is a provision of placing sale orders at market prices.
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