The securities regulator has further allowed transactions against investors' cheques before encashment, subject to liabilities borne by stock brokers and merchant banks for any failure.
Also, if instruments, such as cheque, payment order and demand draft are dishonoured, customers will be forbidden from carrying out any transaction for one year against them.
"The securities regulator has restored the scope of purchasing securities against investors' cheques before encashment considering the demand of the market intermediaries and high net worth individuals, said Mohammad Rezaul Karim, spokesperson of the Bangladesh Securities and Exchange Commission (BSEC)
On October 2, the securities regulator asked the merchant banks and stock brokers not to allow transactions before cheque encashment.
The broad index of Dhaka bourse lost 120 points on October 10, and market operators blamed the decline on the new regulatory measure.
Mr Karim said liquidity slowed a little bit after the restriction had been imposed.
The policy has been restored given that "no transactions remain unsettled", he added.
As per the latest directive, the cheque, payment order, or demand draft received from and for the customers will have to be deposited by stock brokers and merchant bankers into the approved accounts maintained for clients' transactions on the day of receipt.
The cheque, payment order, or demand draft will have to be deposited into concerned accounts on the flowing day if such instruments cannot be deposited on the day of receipt.
The stock brokers and merchant bankers shall not be entitled to quota facilities of initial public offering (IPO), repeat public offering (RPO) and qualified investor offer (QIO) as eligible or qualified investors at least for one year if they default.
The BSEC directive said the stock broker and merchant banker concerned will have to bear the liabilities if the cheque, payment order and demand draft is dishonoured and not credited.
And the amount will have to be transferred from the respective accounts of merchant bankers and stock brokers into the stipulated accounts maintained for investors' transactions.
If they fail to do so, the stock brokers and merchant bankers shall not be entitled to IPO or RPO or QIO facilities.
Moreover, appropriate measures will be taken under the existing securities laws and other relevant laws.
To be compliant, the stock brokers and merchant banks will have to submit a list of dishonoured cheques or payment orders and demand drafts with the particulars of the customers to the commission within 10 days after the end of each month.
In its directive, the securities regulator has also asked the merchant bankers and stock brokers to encourage customers to deposit money through RTGS, EFTN or any other mode of banking channel or system as approved or recognized by the Bangladesh Bank.
mufazzal.fe@gmail.com