1.17 lakh BO accounts scrapped on failure of service charge payment

At least 1,17,522 beneficiary owners accounts of stock investors were scrapped in the month of July due to the failure of payment of annual service charges.

As per instruction of the securities regulator BSEC, the Central Depository Bangladesh Limited (CDBL), the sole securities depository in Bangladesh, and recognised as the infrastructure backbone of the country’s stock market, canceled these BO accounts through brokerage houses for non-payment of annual service charges or renewal fees.

According to the CDBL data, the total number of BO accounts was 18,60,774 as on June 30 last, which currently decreased to 17, 43,252.

Though women are increasingly taking up prominent positions in various sectors, including the stock market, the number of female beneficiary owners account holders plummeted by over 35 per cent over five years.

The number of female BO account holders dropped to 4.73 lakh in March 2023 from 7.33 lakh in March 2018, according to data sourced from the bourses.

Earlier, the Bangladesh Securities and Exchange Commission (BSEC) had asked stockbrokers to scrap multiple BO accounts which were opened using a single NID, bank account and phone number.

The instruction of the securities regulator might have also contributed to the closure of a large number of BO accounts, sources say.

As per the existing rule, a person can open only a single BO account using his or her national identity card, bank account and phone number.

Opening a BO account with the CDBL through a depository participant is mandatory for trading shares at stock exchanges.

BSEC also reduced the renewal fee to Tk 450 from Tk 500 for each BO account back in 2016.

When someone wants to invest and trade in the stock exchanges, he or she needs to create a BO account with the CDBL through a stockbroker or a merchant bank.

The idea to introduce the online BO account opening system was that the number of investors in the bourse would increase further.

On February 9, 2021, the Bangladesh Securities and Exchange Commission had launched the online BO account opening system so that investors can open BO accounts from anywhere anytime.

During the inauguration, the regulator said the opening of BO accounts would now be easier as investors need not go to brokerage houses in person.

But the system did not get momentum due to the lack of proper campaign, market insiders and stockbrokers say.