Legal notice to BSEC as margin lending stops suddenly

Bangladesh Securities and Exchange Commission (BSEC) has been served with a legal notice as some brokerage houses have stopped margin lending, catching investors in insurance shares off guard on October 12.

On Tuesday (October 13), Supreme Court lawyer SA Chowdhury served the legal notice on the commission on behalf of an investor named Mohammad Monwar Hossain.

The legal notice said that the brokerage houses have stopped margin lending on the shares of the insurance company without any notice at the utmost surprise of the investors. Shares of the insurance company collapsed yesterday as a result of their decision. However, the regulatory body has not taken any decision in this regard. No such information was available on the website of the stock exchange.

The commission is working to build an investment-friendly stock market, the notice said. However, a vested quarter is impeding the commission in achieving its goal. Therefore, action needs to be taken against the brokerage houses involved in such activities.

The legal notice has requested the BSEC to conduct a thorough investigation into the decision of not paying margins to insurance companies.

sr/wi