4 brokerages fined Tk 70 lakh for rule breach

Staff Correspondent | Published: 00:05, Nov 22,2017 | Updated: 23:10, Nov 21,2017

 
 

The Bangladesh Securities and Exchange Commission on Tuesday slapped Tk 70 lakh in fine in total on four brokerage houses for breaching securities rules.
The capital market regulator imposed the penalty at a commission meeting presided over by its chairman M Khairul Hossain, a BSEC press release issued on the day said.
The commission fined Sharp Securities Tk 25 lakh as a BSEC inspection found that the firm committed a number of irregularities including providing loans to relatives of its directors and staff, giving margin loans beyond the BSEC-allowed limit and having a shortage of capital in its consolidated customer account.
The brokerage house also provided loans as a dealer and took out cash of more than Tk 5 lakh at a time in breach of securities laws.
The BSEC imposed penalty of Tk 20 lakh on Globe Securities Limited as the regulator found a shortage of capital in the brokerage house’s consolidated customer account in violation of rules 8A(1) and 8A(2) of Securities and Exchange Rule, 1987.
A BSEC inspection also found that the securities house opened beneficiary owners’ accounts in the name of approved representatives, breaching the regulations of the DSE and the BSEC.
The commission also fined SB Securities Tk 15 lakh as a BSEC inspection found that the firm breached a number of BSEC rules and regulations.
The regulator found a shortage of capital in SB Securities’ consolidated customer account.
The brokerage house also breached securities laws by providing loans to its directors’ relatives and staff and giving loans for purchasing shares from the ‘Z’ category. The firm also took out money
from the negative BO accounts.
The BSEC also penalised Khurshid Securities Limited Tk 10 lakh as its inspection found a shortage of capital
in the brokerage house’s consolidated customer account.
The regulator also found discrepancies in clearing account and back office of depository participants that broke laws under the Securities and Exchange Commission Act 2000. The firm also provided margin loans to investors beyond the limit set by the commission.
The commission at the meeting also approved draft prospectus of a Tk 50-crore open-end mutual fund, LankaBangla Al-Arafah Shariah Unit Fund.
Of the fund size, sponsors will contribute Tk 10 crore, while Tk 16 crore will be collected through private placement and the rest Tk 24 crore will be collected from general investors. The face value of each unit of the fund will be Tk 10.
Al-Arafah Islami Bank Employees Gratuity is the sponsor of the fund while LankaBangla Asset Management will act as an asset manager and Investment Corporation of Bangladesh will act as a trusty and custodian of the fund. 

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