SEC relaxes margin loan threshold

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FE Report
The Securities and Exchange Commission (SEC) has set new limit for margin loans for merchant banks and brokerage houses.
Under the new directive, merchant banks and brokerage houses are allowed to lend up to Tk. 100 million in margin loans to individual investors, a senior official at the securities regulator said Sunday.
Margin loans are usually given out to an individual investor against his or her shares.
SEC also changed the final date for adjustment of the already disbursed loans that account for higher than that amount.
"The new date for final adjustments to already disbursed loans above that limit will be September 30," SEC executive director Anwarul Kabir Bhuiyan told bdnews24.com.
The new directive came after president of Dhaka Stock Exchange (DSE) Shakil Rizvi's call to relax the ceiling of margin loan in their next meet with the market regulator.
The securities watchdog issued the new directive amid slide at the country's biggest bourse Sunday.
On July 21, SEC set a ceiling on the lending capacity of merchant banks and brokerage houses and limited it to Tk. 100 million and Tk. 50 million as margin loans to their clients.
The decision impinged on the daily turnover, with the DSE general index plunging by over 200 points.