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SEC sets June, '06 deadline for 90 DSE brokers to become corporate members
FE Report
1/23/2006
The Securities and Exchange Commission (SEC) has fixed June 2006 as the final deadline for 90 brokers of the Dhaka Stock Exchange (DSE) for compulsorily becoming 'corporate members'.
Currently 85 brokers of DSE are corporate members.
"We'll not allow any DSE members to operate their business, if they fail to comply with our directive after the said deadline," one SEC high official told the FE Sunday.
The minimum paid-up capital of a corporate member is Tk 2.5 million (25 lakh) only.
"We admit that the amount is not at all significant in the present context but once enforced, we will definitely raise the minimum amount of paid-up capital to protect the investors' interest in a more effective way," the SEC source said.
The SEC deadline on mandatory corporatisation has been extended two times since 2004.
The corporatisation is one of the conditions of Asian Development Bank (ADB) to release funds against loans to develop the Bangladesh capital market.
All brokers of Chittagong Stock Exchange (CSE), country's second stock exchange, have become corporate members since the very beginning of the bourse 10 years back.
"It is shameful that all the DSE members are yet to become fully corporate entities," one SEC source said.
The source said the growing number of defaults in case of settlements of shares or funds with the general investors by a section of DSE brokers posed a threat to the stock trading.
"How does an investor rely on a DSE member if he/she does not have a minimum Tk 2.5 million paid-up capital," one market operator questioned.
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