Foreign firms want to get DSE brokerage licence

BSEC formulating rules to set eligibility

Mostafizur Rahman | Published: 00:00, Jun 09,2019

 
 

A file photo shows a man monitoring the movement of stock prices on a computer screen at a brokerage house in Dhaka. A number of foreign firms have expressed their interest to obtain brokerage licence from Bangladesh’s premier bourse Dhaka Stock Exchange to expand their business in the country’s capital market.— New Age photo

A number of foreign firms have expressed their interest to obtain brokerage licence from Bangladesh’s premier bourse Dhaka Stock Exchange to expand their business in the country’s capital market.
DSE officials said that the foreign entities showed their interest to obtain trading right entitlement certificate (TREC) licence needed for the brokerage business in the capital market.
UK-based EFG Private Bank, CDF London and Aberdeen Asset Management, China-based CITIC CLSA Securities and USA-based Goldman Sachs Group have expressed their intention to get DSE brokerage licence.
Of them, Goldman Sachs is a multinational investment bank and financial service company. It offers services in investment management, securities, asset management, , and securities underwriting.
CITIC Securities is China’s biggest broker. It focuses on alternative investment, asset management, corporate finance and capital markets, securities and wealth management for corporate and institutional clients around the world.
DSE managing director KAM Majedur Rahman said that some foreign entities expressed their interest to be DSE TREC holder.
He said that it was a good sign that foreign nationals found it beneficial to invest in the Bangladesh capital market.
If the bourse can include a number of foreign firms in the DSE business, it can expect huge foreign fund flow to the market, he said.
Involvement of the foreign entities can change the position of the market significantly, he said.
According to DSE officials, if the bourse starts selling TREC licence, more foreign firms will come to buy the licence as the foreign nationals see good business opportunity in the country.
Therefore, the market regulator felt it necessary to formulate rules regarding selling brokerage licence to the foreign entities and local entities as the current members are not allowed to sell or transfer their licence to others.
BSEC spokesperson and executive director Saifur Rahman told New Age that a committee headed by BSEC executive director Farhad Ahmed submitted reports regarding fresh rules on selling TREC licence of the bourses.
After getting nod from the commission, the rules will be published in newspapers seeking public opinions, he said.
The rules will set eligibility criteria for the companies seeking to buy the licence, he said.
DSE officials said that the bourse had also made some suggestions on the proposed rules.
BSEC officials said that the commission would give importance to a company’s business size and capacity to run brokerage business in awarding TREC licence to it.
The commission may also see its business history, corporate governance and risk management, they said.
They said the regulator would set a minimum paid-up capital requirement for the company to be eligible for the DSE TREC.
Though the BSEC would not bar local companies to buy TREC of the DSE, but it may tighten the rules so that poor companies could not apply for the licence.
Most of the TREC holders at the DSE are not performing well that becomes a problem for the country’s capital market, BSEC officials said.
DSE officials said that they would prefer foreign firms to the local entities for the greater interest of the market.

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