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The DSE Brokers Association (DBA) has made a set of proposals, including the scope of investing undisclosed money into the capital market, to overcome the crisis created following the outbreak of COVID-19.
DBA, an association of stock brokers of Dhaka Stock Exchange (DSE), sent their proposals to the finance minister AHM Mustafa Kamal on Tuesday.
"The financial conditions of the market intermediaries have become weak due to the prolonged economic woes. The market intermediaries including stock brokers are almost unable to continue their business operation," reads the DBA letter, signed by its president Sharif Anwar Hossain.
In its proposal, the DBA has sought the scope of investing undisclosed money into the bond market and secondary market at a ratio of 1:1.
"The undisclosed money invested in bond will remain blocked for three years and the transactions of such bond will be conducted through stock exchanges," said the proposal of DBA.
Trading on both the stock exchanges presently remained closed following public holiday announced to contain the infection of COVID-19.
The association has sought financial support to keep the operations of stock brokers active.
The brokers have sought loan at a rate of 3.0 per cent to bear the operating expenses of companies.
"The amount of the loan, which may be disbursed for at least one year, will be defined following the annual audit reports of the brokerage firms," the DBA proposed.
It also said stock brokers will start repaying the loan from January, 2021.
The stock brokers have also demanded reduction of advance tax at source to 0.015 per cent from existing 0.05 per cent imposed on the commission realised from transactions of listed securities.
The brokers' association has also demanded further financing for the investors who made investments taking margin loans.
"This loan should be disbursed for three years at 3.0 per cent interest."
The brokers also proposed to postpone interest for one year charged against the margin loans.
"Investors will be able to recoup their losses and the market will also be boosted following their active participation in transactions," the DBA proposal said.