The Chittagong Stock Exchange (CSE) has extended the timeframe for applying for new TREC licence from the port city's bourse by one and half months until May 30.
The board of directors of CSE has decided to extend the time for submission of application for issuance of new TREC a brokerage/dealer license to do stock brokerage/dealer business up to May 30, according to a statement on Monday.
The initial deadline to submit applications for new trading right entitlement certificates (TREC) is going to expire on April 15, but the management of the CSE did not get the expected response from the potential firms.
Many firms are showing interest in receiving a TREC licence, but the interested ones barely got enough time to prepare documents in line with regulations concerned and ongoing virus-induced lockdown, said a CSE official, seeking anonymity.
So, the CSE board has decided to extend the deadline until May 30 so those potential firms can apply for a new TREC licence, he added.
The prospective interested applicants in acquiring TREC are requested to submit applications in the sealed envelope marked "Offer for TREC" addressing the managing director to the Chittagong office or Dhaka office of the CSE along with a bank draft or pay-order of Tk 100,000 (non-refundable).
The brokerage licence, also known as TREC, which is a certificate issued by a stock exchange for execution of trading of listed securities as a broker or dealer as per securities laws.
The stock market regulator -- Bangladesh Securities and Exchange Commission (BSEC)-- in November last year issued new regulations regarding issuance of brokerage licence, setting the criteria for being eligible for TREC.
According to the new regulations, an interested local company must have minimum Tk 50 million in paid-up capital while the foreign company has to minimum Tk 100 million in paid-up capital to buy a TREC.
However, a company which is formed jointly with local and foreign shareholders must have a minimum Tk 80 million in paid-up capital to be eligible for getting a TREC.
Also, a local company will have to keep Tk 30 million with the CSE as the security deposit, which is Tk 40 million for joint ventures and Tk 50 million for foreign firms, as per the BSEC (Trading Right Entitlement Certificate) Rules, 2020.
In addition, the institutions which have other issues, including experience in the local and world stock market, would get priority in obtaining a TREC.
The applicant firms also must have required manpower with skills alongside fulfilling other criteria such as their ownership and board structure, transparent disclosures for an acquaintance, and tax and credit market compliances.
But the new TREC holders will only get trading rights, not ownership of the stock exchange or any share of the bourse concerned.