FE Report
The securities regulator has paved the way for reviving the inactive margin accounts postponing the effectiveness of relevant section of Margin Rules, 1999, officials said.
The Bangladesh Securities and Exchange Commission (BSEC) Tuesday took the decision at a meeting chaired by the BSEC Chairman Professor M Khairul Hossain.
Mohammad Saifur Rahman, a BSEC Executive Director, said the latest move was taken considering the prevailing market situation and a proposal recently made by the premier bourse. As per the regulatory decision, the effectiveness of the section 3(5) of the Margin Rules, 1999 will remain inactive till September 30 this year.
The section 3 (5) says, whenever the equity in a client's margin account falls below 150 per cent of the debit balance, the member shall request the client to provide additional margin to bring the equity to not less than 150 per cent. At the same time, the member shall not permit any new transactions in the margin account unless the resulting equity in the account would not be less than 150 per cent of debit balance. The margin accounts which are presently in a stagnant position due to sharp fall in stock prices following the continuous sluggish trend of the market will be transactionable till September 30 this year in line with the BSEC's latest decision.
When asked, a senior BSEC official said the regulator has taken the decision on the postponement of the section of margin rules so that the lenders can rebalance the negative accounts carrying out the transaction within a certain timeframe.
"The type of transaction in margin accounts will depend on the nature of the clients' accounts. The lender will carry on the transaction if the account is discretionary. And the client himself will be able to transact if his account is non-discretionary," the BSEC official told the FE.
At Tuesday's meeting, the securities regulator has imposed a fine worth Tk 0.2 million on Reliance Brokerage Service, Tk 0.3 million on Globe Securities and Tk 0.2 on Island Securities for breaching different securities rules.
The securities regulator has paved the way for reviving the inactive margin accounts postponing the effectiveness of relevant section of Margin Rules, 1999, officials said.
The Bangladesh Securities and Exchange Commission (BSEC) Tuesday took the decision at a meeting chaired by the BSEC Chairman Professor M Khairul Hossain.
Mohammad Saifur Rahman, a BSEC Executive Director, said the latest move was taken considering the prevailing market situation and a proposal recently made by the premier bourse. As per the regulatory decision, the effectiveness of the section 3(5) of the Margin Rules, 1999 will remain inactive till September 30 this year.
The section 3 (5) says, whenever the equity in a client's margin account falls below 150 per cent of the debit balance, the member shall request the client to provide additional margin to bring the equity to not less than 150 per cent. At the same time, the member shall not permit any new transactions in the margin account unless the resulting equity in the account would not be less than 150 per cent of debit balance. The margin accounts which are presently in a stagnant position due to sharp fall in stock prices following the continuous sluggish trend of the market will be transactionable till September 30 this year in line with the BSEC's latest decision.
When asked, a senior BSEC official said the regulator has taken the decision on the postponement of the section of margin rules so that the lenders can rebalance the negative accounts carrying out the transaction within a certain timeframe.
"The type of transaction in margin accounts will depend on the nature of the clients' accounts. The lender will carry on the transaction if the account is discretionary. And the client himself will be able to transact if his account is non-discretionary," the BSEC official told the FE.
At Tuesday's meeting, the securities regulator has imposed a fine worth Tk 0.2 million on Reliance Brokerage Service, Tk 0.3 million on Globe Securities and Tk 0.2 on Island Securities for breaching different securities rules.
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