The Bangladesh Securities and Exchange Commission for the third time on Wednesday extended the suspension period for the rule 3(5) of the Margin Rules-1999 by another six months to allow investors with margin loans to trade shares despite a 150-per cent fall in their portfolio value. ‘Following a request from the Dhaka Stock Exchange, the commission has suspended the effectiveness of the rule 3(5) of the Margin Rules-1999 from January 1 to June 30 of 2015,’ DSE managing director Swapan Kumar Bala told New Age.
He said the DSE made the request after the top 10 stockbrokers at a meeting with the bourse on the day had requested the bourse to make the appeal to the commission.
According to the Margin Rules-1999, a stockbroker or a merchant bank is not allowed to make any new transaction in the margin account if the equity falls below 150 per cent of the debit balance.
If the equity in a client’s margin account falls below 150 per cent of the debit balance, the member will request the client to provide additional margin to bring the equity to not less than 150 per cent, it said.
Clients have to deposit additional margin by deposit of cash or marginable securities within three days from the date of notice, the rules said.
For the first time the BSEC had extended the suspension till September 30. The commission for the second time on September 30 extended the waiver for the margin account holders till December 31 of 2014.
-With New Age input
