BSEC fines two brokerage firms Tk5 lakh each

The Bangladesh Securities and Exchange Commission (BSEC) has fined two brokerage firms, Prudential Capital Limited and NLI Securities Limited, with penalties of Tk5 lakh each due to deficits found in their Consolidated Customer Accounts (CCA).

The commission made this decision during a meeting on Sunday (10 October), according to a press release.

The commission has also decided that if the deficit in the consolidated customer accounts persists, an additional fine of Tk10,000 will be imposed per day.

A CCA is a separate bank account maintained by stockbrokers to hold unused cash from their clients' beneficiary owner accounts. 

It is strictly prohibited to use this money for any purpose other than paying for securities purchased by the client or collecting commissions or fees owed by the client. Any unauthorised use of funds from the CCA would result in a deficit.

If a brokerage firm incurs a deficit in its CCA, it will automatically face a suspension of all quota facilities. This includes the suspension of free limit facilities provided by the stock exchanges, eligibility for initial public offering quotas as a qualified investor, and any dividends received as members of the stock exchanges.

Additionally, a brokerage firm's ability to open digital booths or branches will be suspended if it fails to comply. The renewal of its depository participant licences will also be halted until dues are cleared.

DSE Brokers Association President Saiful Islam earlier told The Business Standard that the securities regulator did not take effective action when instances of embezzlement were discovered. He added that giving responsibility to the stock exchanges would likely make regulation more effective.

Market insiders have said that both the BSEC and the stock exchanges should be more accountable and take stronger action against these issues.