Three merchant banks are yet to comply with Bangladesh Securities and Exchange Commission’s directive to convert omnibus accounts into individual beneficiary owner’s accounts by February, 2013.
An omnibus account is one that contains the accounts of many individual investors. However, it remains out of regulatory supervision.The BSEC on November 4 last year asked the merchant banks to convert all omnibus accounts to BO accounts through own depository participants by December 31 of the same year.
Later, the BSEC on December 30 extended the deadline to February 28 this year as the merchant banks failed to complete the process within the deadline.
According to BSEC officials, three merchant banks – Banco Finance and Investment, Grameen Capital Management and Union Capital – are yet to comply with the commission’s directive.
‘We are under a process of separating our merchant banking wing form the parent organisation Union Capital, which made us delay the conversion of clients’ shares from omnibus accounts to BO accounts,’ Union Capital managing director Akter Hossain Sannamath told New Age.
He said the company would comply with the BSEC directive soon.
‘Most of our clients having omnibus accounts are now trading through another subsidiary brokerage house of Union Capital by opening BO accounts while the rest had transferred their accounts to discretionary accounts for trading,’ he added.
‘The process of opening DP is underway. When we get DP licence we would convent all non-discretionary accounts under the omnibus accounts into BO accounts,’ Grameen Capital Management chief executive officer Anwar Husain told New Age.
Opening depository participant with the Central Depository Bangladesh Limited is mandatory for all merchant banks to open beneficiary owner’s accounts for each client.
‘Three merchant banks are still operating transactions under omnibus accounts as they are yet to get depository participant licences,’ a senior BSEC official told New Age.
‘The matter is still under observation and we will take action if the three companies continue the practice after getting the DP licence,’ he said.
The practice of omnibus accounts was highly criticised by the probe committee that investigated into the 2011 stock market scam.
According to the CDBL data, a total of 1,01,263 BO accounts were opened with the CDBL from omnibus accounts till March 21.
-With New Age input
