The securities regulator has decided to scrap the IPO (initial public offering) quota facility of three merchant banks for shortage of paid-up capital required to conduct operations as portfolio manager.
Their licenses will also be cancelled if they fail to fulfill the shortage of capital by June 30, 2021.
The merchant banks which came under the regulatory actions are Bengal Investments, CAPM Advisory and PLFS Investments.
The Bangladesh Securities and Exchange Commission (BSEC) on Wednesday took the decision, among others, at a meeting held at the BSEC office.
Asked, an official of the securities regulator said a merchant bank needs a minimum paid-up capital worth Tk 250 million to avert investment risks.
"Primarily, the BSEC has scrapped their IPO quota facility availed as eligible investors. The process of canceling their licenses will be started if they fail to fulfill the shortage of paid-up capital set for merchant banks," the BSEC official said.
At Wednesday's meeting, the securities regulator also imposed penalties on three brokerage firms for breaching the securities rules.
As per the BSEC's decision, Nexus Securities has been fined Tk 0.2 million, MTB Securities Tk 0.5 million and First Lead Securities Tk 0.2 million.
The securities regulator has also decided to fix the IPO subscription period for Sonali Life Insurance in May, 2021 instead of March.
The regulator took the decision considering the company's plea and investors' interest, according to the BSEC officials.