The Financial Express

DSE asks 15 brokerage firms to fulfill dearth of investors' funds by Thursday

| Updated: July 16, 2020 09:53:50

DSE asks 15 firms to fulfill dearth of investors' funds by Thursday

The premier bourse has asked some 15 brokerage firms to fulfill the deficiency of investors' funds, found in their consolidated customers' accounts, by tomorrow (Thursday).

After fulfilling the deficiency, the brokerage firms will have to attend the Dhaka Stock Exchange (DSE) hearing.

"On completion of the hearing, the exchange will take the next course of action against the errant firms, which failed to fulfill the deficiency within the stipulated timeframe," said Md. Shakil Rizvi, a director of the DSE.

The exchange's instruction regarding the fulfillment of deficiency of investors' funds came against the backdrop of misappropriating investors' funds by a brokerage firm - Crest Securities.

Following the incident, the securities regulator and the DSE have increased monitoring over activities of the brokerage firms to ensure protection of investors' funds.

As part of the move, the premier bourse has recently sought information from the brokerage firms regarding their consolidated customers' accounts.

After receiving information, the DSE has found a moderate amount of fund deficiency in the consolidated customers' accounts, maintained by some 15 firms.

Mr. Rizvi further said the exchange will conduct hearing to be further sure about the status of investors' funds, maintained by those firms.

The DSE director also said the amount of initial deficiency may decline after cross-checking at the hearing.

"No one will be spared if s/he fails to ensure protection of the investors' funds."

He added that some brokerage firms, including a leading one, have already fulfilled the deficiency, found in their consolidated customers' accounts.

As per rules, each of the stock brokers maintains a consolidated customers' account in its name with any scheduled bank for deposit of money received from the customers and for payment of money to them.

After the incident of embezzling the investors' funds and shares by Crest Securities, the securities regulator delivered an instruction for strengthening monitoring over operations of the stock brokers.

The regulatory inspection in the brokerage firms remained suspended for a long time due to shortage of manpower in the securities regulator.

Following the Crest Securities incident, the securities regulator formed three committees, comprising representatives of the stock exchanges and the regulator.

These committees have been asked to conduct inspection in different brokerage firms on a regular basis.

The firms' consolidated customers' accounts will also come under the committees' purview of inspection.


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