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BSEC asks bourses to ensure trades through 'genuine' BO accounts

| Updated: May 24, 2022 10:22:44


BSEC asks bourses to ensure trades through 'genuine' BO accounts

The securities regulator has asked the bourses and depository authority to ensure trades through 'genuine' BO (beneficiary owners) accounts only.

The Bangladesh Securities and Exchange Commission (BSEC) on Wednesday delivered the instruction through a letter sent to both the bourses and Central Depository Bangladesh Limited (CDBL).

The regulatory instruction came in the backdrop of conducting trades using some closed BO accounts.

"….you are advised to take necessary initiatives so that trade can be conducted using genuine BO accounts," said the BSEC letter.

It said the securities regulator's market surveillance and intelligence department has been observing regular sale conducted using some closed BO accounts.

After analysing international trade practice, the BSEC has found no example of trade using closed BO account and explanation given by trading brokers who are involved in such trading activities is not satisfactory.

In addition, in their opinion they mentioned no laws or regulations that allow trade using closed BO accounts, said the BSEC letter.

Under such a situation, the securities regulator has asked Dhaka Stock Exchange and Chittagong Stock Exchange and the CDBL to take necessary initiatives to ensure trades through genuine BO accounts only.

To trade in the secondary market and apply for primary shares, an investor has to open a BO account with the CDBL through a depository participant (DP), which is usually a stockbroker or a merchant bank.

The DPs suspend BO accounts in July every year if an investor fails to pay the annual fee of maintaining the accounts by June.

According to CDBL information, the number of active BO accounts stood at above 2.08 million as on May 18.

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