Sinha Securities business license renewed for six months
Due to a CCA deficit of nearly Tk10 crore, the firm had to remain out of business since this May
The securities regulator has renewed the brokerage and dealer registration license of Sinha Securities for six months on condition to clear all the deficits in its consolidated customer account (CCA) in six monthly installments.
Due to a deficit of nearly Tk10 crore in its consolidated customer account (CCA), the Dhaka Stock Exchange (DSE) member firm had to remain out of business since this May as the Bangladesh Securities and Exchange Commission (BSEC) then did not renew its license that expired at the end of April.
When a broker misuses the idle cash of its brokerage clients, the CCA balance becomes negative. Pouring back the same amount of money is a must to make the account balance positive.
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Giving a hand to Sinha Securities' clients, who were deprived of trading opportunities, the BSEC last week allowed the firm to fill the gap in installments for over six months and it had to deposit Tk2 crore initially.
The regulator also instructed the DSE to accept the special arrangement and conduct spot inspection within 45 working days of its operation resumption.
The firm also would not enjoy any dividend as a shareholder of DSE, the special quota to subscribe for primary shares until the CCA deficit is cleared.
CCA deficit became a widespread problem in the brokerage industry as 108 brokers created a loophole of over Tk585 crore in their CCAs.
After several cases of clients' money embezzlement in the brokerage industry, 102 of the 108 brokerage firms have filled in the gaps, thanks to the regulatory hardline and DSE efforts. Only six firms, including Sinha Securities, were yet to make it happen.
As of Sunday, the six firms were running with a total of over Tk49 crore deficits in their CCAs.
PFI Securities having over Tk33 crore in CCA deficit, Modern Securities with over Tk5 crore, Fareast Stocks and Bonds over Tk1.2 crore, Asia Securities Tk62 lakh and Latif Securities Tk32 lakh in CCA deficits were the other non-compliant ones, as per the latest regulatory data seen by TBS.
Modern Securities, however, claimed last week that its back-office software had bugs that created the figure mismatch and it sought three months to manually cross check things.
