Regulator punishes stock brokers for deficit in consulated customer account

Bangladesh Securities and Exchange Commission (BSEC) has imposed several restrictions on errant stock brokers who keep deficit in their investors' consulated customer account.

In a directive, the stock market regulator said it will not renew the licence of the stock brokers until they adjust the deficit.

The BSEC imposed the restrictions on Tuesday to ensure security of investors' money and securities and bring back discipline in the capital market.

According to the order, the TREC holders will be deprived of dividend against their shares held at the stock exchange until the shortages of the customers' accounts are adjusted.

"Renewal of licence of TREC holder companies and their DP (depository participant) will remain suspended until they adjust the shortages found in the consolidated customers' accounts." it added.

The TREC holders' due facilities offered for the initial public offering, repeat public offering and qualified investors offer will also remain suspended if they fail to adjust their clients' money and securities.

As eligible or qualified investors, the stock brokers avail quota facility in initial public offering.

The regulatory approval for opening new branches of brokerage firms was a long standing demand, it said.

In its order, the securities regulator said the TREC holders will not be allowed to open new branches or digital booths if they fail to repay investors' money along with adjusting shortages of securities.

The securities regulator said the CDBL will keep the errant TREC holders under special observation for one year after making up for the shortages of investors' money and securities.

Recently, three brokers of the DSE - Tamha Securities, Crest Securities and Banco Securities - had embezzled huge amounts of investors' money and shares.

Several other brokers also kept deficit in their consolidated customers accounts.