Unrealised Losses
BSEC gives M-banks, brokers more time to keep provision
Fines five brokerage, one company for violating rules
The Bangladesh Securities and Exchange Commission on Tuesday extended the loan provisioning deadline by one year to December 31, 2014 of the unrealised losses that merchant banks and brokerage firms incurred in 2012. The decision was made in a regular meeting of the BSEC in Dhaka presided over by its chairman M Khairul Hossain. The BSEC in January this year, following an appeal from the merchant bankers, had allowed keeping 100 per cent provision of their unrealised losses in own portfolio and losses against margin loans issued to their clients in 2012 in five instalments.
In December 2012, Bangladesh Bank had allowed some banks to keep 100 per cent provision in five instalments — each of 20 per cent — for unrealised losses against their own portfolio investments in the capital market.
The BSEC in Tuesday’s meeting fined five brokerage firms for violating securities rule in short-selling of clients shares and margin loan rules.
The market watchdog fined DMR Securities Tk 3 lakh for three separate incidents of short selling.
It also fined Tamha Securities and Pioneer Shares and Securities Tk 1 lakh each on the same ground.
The BSEC fined Dhaka Stock Exchange member Azam Securities Tk 7 lakh for violating margin loan rules by providing excessive loan to clients, providing margin loan to directors and providing margin loan to Z category shares.
The BSEC also fined Chittagong Stock Exchange member Be Rich Limited Tk 1 lakh for taking more than Tk 5 lakh in cash from clients.
The market regulator also fined Delta Spinners Limited Tk 10 lakh for non-compliance in its audited financial statement during 2007-2012.
-With New Age input
