The Bangladesh Securities and Exchange Commission on Wednesday decided to suspend the initial public offering quota facility for three merchant banks for breaching securities rules.
The three merchant banks are Bengal Investment Limited, CAPM Advisory Limited and PLFS Investment Limited.
The regulator also warned the three merchant banks that it would take steps to cancel their licences if they fail to mitigate capital shortage by June 30.
As per securities rules, merchant banks and portfolio managers must have capital of Tk 25 crore. But the three merchant bankers have less than the requirement.
The BSEC made the enforcement decision at a commission meeting presided over by its chairman Shibli Rubayat-Ul-Islam, a BSEC press release said.
As per the public issue rules, 2015 amended in 2019, eligible investors excluding mutual funds enjoy 30 per cent quota facility in IPO under fixed price method while eligible investors without mutual funds enjoy 40 per cent quota for IPO under book building method.
Eligible investors are merchant bankers, asset managers, mutual funds, stock-dealers, banks, financial institutions, insurance companies, fund managers, alternative investment funds, foreign investors having account with any security custodian registered with the commission, recognised provident funds, approved pension funds and approved gratuity funds.
The BSEC at the meeting also fined MTB Securities Limited and Nexus Securities Limited Tk 5 lakh and Tk 2 lakh respectively for violation of various securities rules.
The regulator also slapped penalty of Tk 2 lakh on First Lead Securities Limited for breaking securities rules.
The commission punished the brokerage house following a complaint filed by four investors.
The BSEC at the meeting also decided to defer IPO share subscription of Sonali Life Insurance Limited to May from March following an application from the company.
The regulator made the decision for the interest of the investors, the BSEC press release said.
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