The Bangladesh Securities and Exchange Commission has asked brokerage houses to distribute interest income earned from consolidated customer accounts among eligible investors.
If a minimum credit balance of Tk 1 lakh remains in an account continuously for at least one month during a financial year and earned a minimum of Tk 500 interest income, customers will be eligible for the income, according to the new instructions of the Bangladesh Securities and Exchange Commission (BSEC).
The stock market regulator gave the bourses and all brokerage houses necessary instructions in a directive issued Monday in this regard.
As per the directive, while calculating the interest income for distribution among customers’ account(s), a stockbroker will have to deduct the annual account maintenance expenses, bank charges and other charges from the annual gross interest income earned in the consolidated customers’ account (CCA).
The effective rate of interest income earned from the CCA must be calculated by the annual net interest income distributable to the customers divided by the weighted average credit balance (day-end basis) of the CCA for the year and multiplied the results by 100, the directive said.
According to the directive, a stockbroker must distribute the net interest income to every eligible customer within 30 days of the end of each financial year.
According to Sub-rule (1) of Rule 6 of the Securities and Exchange Rules, 2020, registered stockbrokers are required to distribute the net interest income earned (after adjusting bank charges, if any) from the bank account(s) opened for the CCA to the customers proportionately and if any undistributed interest income is left, which will be transferred to the Investors’ Protection Fund of the exchange(s) within 30 days of the end of each financial year.
If the transferring of the interest income to the Investors’ Protection Fund of the exchange(s) is delayed for any reason, an additional 2 per cent interest per month will be charged on such income, which will also be transferred to the Investors’ Protection Fund, it said.
The directive was issued mainly to increase liquidity in the stock market, Executive Director and Spokesman of BSEC Mohammad Rezaul Karim told The Business Post.
“This will increase the tendency of investing in the capital market without depositing the money as an integrated customer,” he added.
Stock market analyst Professor Abu Ahmed said the directive credited funds in consolidated accounts, not stockbrokers.
He recommended the commission should maintain software to centrally observe transactions of consolidated accounts.
