Dhaka Stock Exchange (DSE) has taken an initiative of holding training programmes for the owners and managements of all stock brokers to aware them protecting investors' money and shares.
The premier bourse DSE has come up with the training programmes following an instruction of the securities regulator against the backdrop of embezzling investors' money and shares by three stock brokers.
The Bangladesh Securities and Exchange Commission (BSEC) sent three letters to the DSE on February 10 last, asking it to hold separate training programmes for all owners and managements of the brokerage firms to strengthen the compliances of securities related laws in operational activities.
"It has been observed that some brokerage firms are not being managed professionally. The DSE is arranging the training programmes to make the firms more responsible in case of ensuring investors' money and shares," said M. Shaifur Rahman Mazumdar, chief operating officer at the DSE.
He said the main bourse will hold the first training programme for the brokerage firms' compliance authority, which includes chief executive officer and managing directors, within next one or two weeks.
The securities regulator has also asked the TREC (Trading Right Entitlement Certificate) holder companies to hold training programmes for their employees.
In its letters, the securities regulator has also defined the topics of the awareness programmes to be held for the owners, managements and employees of the brokerage firms.
The commission has instructed the DSE for taking initiatives to arrange awareness programmes for the chairman, managing director, directors, and shareholders of all TREC holder companies for the greater interest of investors and development of capital market.
The topic of the awareness programme will be titled 'strengthening the securities of fund and securities of investors'.
Considering the maintenance of the health cautions for Covid-19, the DSE has been asked to limit the number of participants by 100 for each session.
Presently, there are 308 stock brokers, including 58 new ones, in the premier bourse. Of the 58 new brokers, six have commenced their operations recently.
Three brokerage firms - Tamha Securities, Crest Securities and Banco Securities- embezzled a substantial amount of money and shares of their clients recently.
Apart from embezzling shares, Crest Securities misappropriated their clients' fund worth Tk 280 million, Banco Securities Tk 280 million and Tamha Securities around Tk 720 million, according to the DSE information.
The DSE suspended trades at these firms along with suspending their DP (depository participant) licenses.
Bangladesh Financial Intelligence Unit (BFIU) also froze the bank accounts of the firms and their owners.
Of the three brokerage firms, Tamha Securities misappropriated its clients' money and shares using duplicate back office software.
Meanwhile, the DSE formulated uniform guidelines for the back-office services provided by the software vendors.
If the guidelines are enacted, the software vendors will have to ensure uniform back-office services for stockbrokers.
The vendors willing to develop the stock brokers' back offices will also have to be enlisted with the DSE after fulfilling specific criteria set for providing back office services.
And a stock broker will have to take the exchange's approval before appointing a vendor for the back office services.
The main objective of introducing the back office guidelines is to ensure unaltered reporting on the position of investors' money and shares maintained by the stock brokers.
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