Home ›› 25 Mar 2022 ›› Stock
The Bangladesh Securities and Exchange Commission has cancelled the primary approval of trading right entitlement certificates (TREC) of 12 brokers for failing to fulfill the criteria required to get the licneces.
The brokers were members of the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE), according to a letter sent by the regulator to the managing directors of the brokers on Tuesday.
In November 2021, the BSEC framed new regulations related to the issuance of brokerage licence, setting the criteria for qualifying TREC holders.
The brokers are Bridge Stock and Brokerage, Beximco Securities, Shah Mohammad Sagir & Co, Merchant Securities, SBAC Bank Investment, Bridge Stock & Brokerage, Columbia Shares & Securities, Biplob Holdings, Benemoy Securities, B & Bss Trade International, Matrix Securities, and DP7. Apart from Bridge Stock and Brokerage, all are CSE members.
The brokerage licence, also known as TREC, is a certificate issued by a stock exchange for the execution of trading of listed securities as a broker or dealer as per securities laws.
According to the new regulations, any local or foreign company needs to pay Tk 100,000 in applying for a TREC licence and once it gets the nod, it is required to provide an additional Tk 500,000 as a registration fee.
Moreover, the local companies must have a minimum of Tk 5 crore in paid-up capital while the foreign companies must have a minimum of Tk 10 crore in paid-up capital to buy a TREC.
The joint venture companies require a paid-up capital of Tk 8 crore to buy a TREC.
Also, a local company must keep Tk 3 crore with the respective bourses as the security deposit, which is Tk 4 crore for joint ventures and Tk 5 crore for foreign firms, according to the BSEC (Trading Right Entitlement Certificate) Rules, 2020.
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.
At present, the DSE has 250 TREC holders and CSE has 148 TREC holders.
