Many brokerage firms are not paying the dues of government, securities regulatory and depository authority despite the firms realise BO (beneficiary owner's) account maintenance fees from their clients on regular basis.
According to information of Central Depository Bangladesh Limited (CDBL), a total of 87 brokerage firms still remain non-compliant in case of paying the dues that come from BO account maintenance fees.
To trade in the secondary market and apply for primary shares, an investor has to open a BO account with the CDBL through a depository participant (DPs), which is usually a stockbroker or a merchant bank.
For maintaining a BO account, an investor has to pay an annual fee of Tk 450 which is deposited to different authorities including the CDBL as per stipulated rate.
A senior CDBL official said a substantial amount of fees remains un-realised as many brokerage firms are not paying the dues for a long time.
Under such a situation, the securities regulator is taking stern actions against some errant brokerage firms as they have been showing reluctance for years in case of paying the dues of different authorities including the CDBL.
"Brokerage firms take BO account maintenance fees from their clients in right time. But many of them are reluctant in case of paying the CDBL's dues in spite of giving reminders repeatedly," said a senior official of the CDBL.
Of the non-compliant brokerage firms, some have paid the dues of the CDBL partially.
As part of the regulatory move, the CDBL suspended the trading at Sinha Securities, a brokerage firm of Dhaka Stock Exchange (DSE), in last week as the firm has not been paying the dues of different authorities including the depository authority since 2016.
The officials said the CDBL has dues amounting to around Tk 50 million to Sinha Securities.
The CDBL, however, on Monday lifted suspension of trading from Sinha Securities as the securities regulator has allowed the firm to pay the dues within six months.
Trading at First Lease Securities, a Sylhet based brokerage firm of Chittagong Stock Exchange (CSE), also remains suspended upon its failure to pay different authorities' dues that come from the maintenance of BO accounts.
The CDBL has dues amounting to Tk 3.0 million to First Lease Securities, the officials said.
Trading also remains suspended in two other brokerage firms of the port city bourse CSE due to different non-compliances including non-payment of the dues of depository authority. The brokerage firms are Samin Securities and Sad Securities.
Previously, an investor had to pay Tk 500 as maintenance fee of a BO account.
In 2016, the securities regulator reduced the renewal fee to Tk 450 from Tk 500 for each BO account to reduce financial burden on investors.
Of Tk 450, Tk 200 goes to the government exchequer, Tk 100 to depository participants (DPs), Tk 100 to the CDBL and the remaining Tk 50 to the BSEC.
The number of active BO accounts reached its peak at around 3.4 million in the fiscal year 2010-11, the year of market bubble-burst.