Share purchase with bank cheque barred again

The Bangladesh Securities and Exchange Commission (BSEC) has asked stockbrokers not to buy shares with bank cheques before encashment.

On October 2, the stock market regulator asked the stock exchanges to take necessary measures in this regard in line with a circular issued on December 6, 2010.

On Tuesday, the bourses notified all stockbrokers and asked them to follow the instruction.

Previously, clients gave bank cheques to stockbrokers, who in turn instantly purchased shares with money from their accounts without knowing whether the clients had the money in their bank accounts.

The market had plunged by 467 points in two days after the issuance of the circular on December 6, 2010. BSEC suspended its effectiveness on December 8, 2010, and the market recovered by 129 points on the following day.