BSEC fines two stock brokers for bending rules

The stock market regulator has fined two stockbrokers of the Chittagong Stock Exchange (CSE) for breaching securities rules.

Based on the investigation by the port city bourse, Bangladesh Securities and Exchange Commission (BSEC) slapped a penalty of Tk 5 lakh and Tk 2 lakh on DN Securities and Firstlead Securities respectively.

The decisions came at a commission meeting chaired by its Chairman Shibli Rubayat Ul Islam at the BSEC office in Dhaka yesterday.

DN Securities did not send trading details to its customers regularly and did not preserve pay in slips, investigators found.

The stockbroker also utilised funds from its customers' accounts to apply for initial public offering in its own name.

The company received more than Tk 5 lakh in cash from customers though it was supposed to take the funds in a cheque.

CSE found that Firstlead Securities did not prepare accounts book and other documents as per securities rules and allowed an authorised representative to trade in his own name.

By bending rules, the company also kept a deficit in its consolidated customer bank account.

The company transferred funds from the accounts of customers to dealers' accounts and lent the money to its officials and directors.

In another development, BSEC has allowed Lub-rref (Bangladesh) to seek cut-off price to raise funds from the stock market.

To go for initial public offering through the book building method, a company needs to find a cut-off price, which comes after bidding among institutional investors.

Lub-rref will raise Tk 150 crore from the stock market and with the initial public offering proceeds the company will expand its business and repay loans.

The regulator also decided to take a host of measures to speed up fund-raising from the stock market and approved a work plan in this regard.