Licenses of stock brokers will not be renewed and their existing facilities will be denied if they have dues in payment of fees of both BO account maintenance and share settlement.
The Bangladesh Securities and Exchange Commission (BSEC) on Tuesday imposed the restrictions to facilitate the realisation of pending fees of BO account maintenance and share settlement.
The regulatory directive came against the backdrop of a substantial amount of pending fees of account maintenance and share settlement.
"Some DPs' payments of fees have been remained pending for a long time. It has been proved that those DPs have been delaying the payments of fees intentionally," said the BSEC directive.
As the regulatory directive, renewal of licence of concerned TREC holder companies and their DP (depository participant) will remain suspended if the companies have dues in payment of fees for account maintenance and share settlement.
The TREC holders will be deprived of dividend against their shares held at the stock exchanges for non-payment of the said fees.
The order said the TREC holders' facilities offered for the initial public offering (IPO) and repeat public offering (RPO) will also remain suspended if they fail to pay the dues of such fees.
In its order, the securities regulator said the TREC holders will not be allowed to open new branches or digital booths if they fail to repay the fees.
Besides, the stock brokers will not be entitled to the facilities of free limit for non-payment of pending fees of account maintenance and share settlement.
The free limit is the amount of aggregate (gross) trade exposure for each TREC holder on which no TREC holder's margin shall be applicable.
According to section 3 of the exchange's TREC holders' margin regulations 2013, the free limit will be Tk 100 million in respect of the stock exchange TREC holders' margin deposit with the stock exchange on each trading day based on the total buy exposure.
In case of foreign trades, the exposure will be on total gross trade exposure instead of buying exposure if there remains any unsettled sales exposure.
In its directive, the securities regulator asked the Central Depository Bangladesh Limited (CDBL) and both the bourses to implement the regulatory order issued to help realise the pending fees for BO account maintenance and share settlement.
According to the CDBL officials, some 50 stock brokers have not yet paid pending fees of account maintenance and share settlement.
In 2016, Bangladesh Securities and Exchange Commission (BSEC) reduced the renewal fee to Tk 450 from Tk 500 for each BO account with the aim of reducing the financial burden on investors.
Of Tk 450, Tk 200 goes to the public exchequer, Tk 100 to DPs, Tk 100 to the CDBL and the remaining Tk 50 to the BSEC.
