The Financial Express

DSE extends timeframe for applying for new TREC licence

| Updated: March 20, 2021 10:13:11

DSE extends timeframe for applying for new TREC licence

The Dhaka Stock Exchange (DSE) has extended the timeframe for applying for a new TREC licence from the prime bourse by 10 more days until March 28.

The DSE management has decided to extend the deadline for applying for new trading rights entitlement certificate (TREC) licence at a meeting held on Tuesday, said a DSE high official.

Earlier on February 2, the country's prime bourse invited applications from eligible firms to submit applications by March 18 to issue trading right entitlement certificates.

Despite the initial deadline expiring today (Thursday), the management of the DSE did not get 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 themselves in line with regulations concerned, said the DSE official, seeking anonymity.

So, the management of the DSE decided to extend the deadline until March 28 so that potential firms can apply for new TREC licence, he added.

The brokerage licence, also known as TREC which is a certificate issued by a stock exchanges 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, a company or individual will have to spend Tk 100,000 in applying for a TREC licence and once they get the approval, they will have to provide another Tk 500,000 as registration fee.

Besides, the local companies must have minimum Tk 50 million in paid-up capital while the foreign companies have 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 DSE 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.

A company can also run Shariah-based brokerage business, the DSE official said.

In such a case, the company should have a Shariah board and should have at least an adviser who has post-graduation in Fiqah.

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.

At present, there are 250 TREC holders in the DSE. Of them 238 are active and some of them continued struggling in running their business.

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