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BSEC revises margin loan rules again

Staff Correspondent | Published: 22:32, Sep 29,2020

 
 

The Bangladesh Securities and Exchange Commission has revised the brokerage houses margin loan limit for clients, lowering the maximum limit of such loans set a week ago.

The BSEC issued a directive on Monday regarding the issue with effect from January 1, 2021. The directive repealed the previous one issued on September 21 which was supposed to come into effect from October 1.

According to the revised directive, merchant bankers, portfolio managers and brokerage houses at the DSE can provide margin loans to clients based on the movement of the key index, DSEX.

If the DSEX falls below 4,000 points, the margin loan would be given at the rate of 1:0.75, which was 1:1 in the previous rules, it said.

This means that the intermediaries can provide a maximum of Tk 0.75 in loan against Tk 1 of a client’s deposit.

If the DSEX remains between 4,001 to 7,000 points, the clients of the intermediaries can get the maximum margin loan at the rate of 1:0.50. For 7,001 and above, the rate would be 1:0.25.

The margin loan now has been set at 1:0.5 in the revised directive. In the previous directive, the margin loan was set at the rate of 1:0.75 if the DSEX remains between 4,001 and 5,000 points, 1:0.5 for the index staying between 5,001 and 6,000 points, and 1:0.25 for the index staying above 6,001 points.

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