• Saturday, December 20, 2014

Freedom in the air

1.44 lakh BO accounts closed in July

Sarwar A Chowdhury

Around 1.44 lakh BO accounts were closed in the first month of the fiscal year due mainly to non-submission of renewal fees.
Investors are required to renew their BO (beneficiary owner's) account every June for a certain fee.
The total number of BO accounts now stands at around 28 lakh, according to statistics available from the Central Depository of Bangladesh Ltd, which preserves electronic data of all individual and institutional investors. In fiscal 2013-14, some 2.20 lakh BO were closed.
If an investor does not renew or deposit the annual fee with the DP [depository participant], the account is closed automatically, according to Md Moniruzzaman, managing director of IDLC Investments, a merchant bank.
At present, an investor has to pay Tk 500 per annum to keep the account active. Of the Tk 500, the DP gets Tk 100, the CDBL Tk 150, the Bangladesh Securities and Exchange Commission Tk 50 and the remaining Tk 200 goes to the government exchequer.

To trade in the stockmarket and apply for primary shares, an investor has to open a BO account with the CDBL through a DP, which is usually a stockbroker or a merchant bank.
Moniruzzaman said there are many BO accounts that were opened only to participate in the initial public offerings (IPO), but most remain empty or share-less after unsuccessful applications.
“Maybe the IPO applicants are not willing to continue their BO accounts amid the dull situation in the market. It is logical that investors will not want to spend extra money to keep their BO accounts operative,” he added.

Published: 12:00 am Thursday, August 07, 2014

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