150pc Decline In Portfolio Value
BSEC allows trading for another 6 months
The Bangladesh Securities and Exchange Commission for the second time has extended the suspension period over the rule 3(5) of the Margin Rules-1999 by another six months in a bid to allow investors with margin loans to trade shares despite 150-per cent decline in their portfolio value.
‘In the interest of the investors and securities market, the suspension period of effectiveness of the rule 3(5) of the Margin Rules-1999 has been extended from October 1 to March 31 next year,’ the BSEC said on Tuesday in an order signed by its acting chairman Md Helal Uddin Nizami.
According to the Margin Rules-1999, a stock broker 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 shall request the client to provide additional margin to bring the equity to not less than 150 per cent, it said.
And clients have to deposit additional margin by deposit of cash or marginable securities within three days from the date of notice, the rules said.
In April 10 2013, the commission for the first time, following a Dhaka Stock Exchange appeal, had postponed the effectiveness of Rules 3(5) of Margin Ruels-1999 for restoring stability in the stock market.
The DSE then had urged the commission to allow stockbrokers and merchant bankers to restructure their clients’ margin accounts, which were in the negative, so that they can minimise their losses.
The commission extended the suspension for the first time till September 30.
-With New Age input
