Bangladesh
4 years ago

BSEC extends timeframe for provisioning against unrealised losses

Published :

Updated :

The securities regulator has extended the timeframe for keeping provision against unrealised losses in accounts of the stock dealer, stockbrokers, and merchant banks' own and their client portfolios until December 31, 2023.

The unrealised losses took place due to the revaluation of portfolios of the merchant banks and stock dealers and their clients.

The latest decision came at a meeting of the Bangladesh Securities and Exchange Commission (BSEC) held on Thursday, presided over by BSEC Chairman Prof. Shibli Rubayat Ul Islam.

The stock market regulator has taken the decision following the plea of DSE Brokers Association of Bangladesh (DBA), Bangladesh Merchant Bankers Association coupled with ongoing Covid-19 pandemic, according to a statement issued by BSEC.

DSE Brokers Association and the BMBA recently urged the securities regulator to extend the timeframe by three more years, mentioning the overall bearish market trend and ongoing Covid-19 pandemic.

The market situation and ongoing Covid-19 situation have taken into account while making the decision of extending the timeframe of keeping provision against unrealised losses, said a BSEC official.

The existing deadline of keeping provision against unrealised losses will be expired on December 31, 2020.

There is no need for provisioning against unrealised losses in 2020 and anyone can take the opportunity, said the regulator in the statement.

But, after this period, all organisations have to follow International Financial Reporting Standards (IFRS) for provisions, it added.

After a stock market debacle in 2010-11, the stock market regulator issued a directive about provisions against unrealised losses in 2013.

Later the securities regulator extended the deadline several times responding to the application of related firms.

[email protected]

Share this news