The securities regulator has approved the amendment to the Investors' Protection Fund Regulations, 2014, raising the volume of support to Tk 0.5 million for an individual claimant from previous amount of Tk 0.1 million, officials said.
Official sources said the Bangladesh Securities and Exchange Commission (BSEC) approved the amendment Tuesday but is yet to disclose it formally.
As per the previous Investors' Protection Fund Regulations, 1999, an investor, who failed to get shares or money from a brokerage firm, was allowed to apply for Tk 0.1 million from the protection fund.
"Earlier, an individual was allowed to get support from the Protection Fund if a brokerage firm became insolvent or went for winding up. As per the amendment, investors will also be allowed to get support if a brokerage firm is declared defaulter by the exchange," said Dr. Swapan Kumar Bala, managing director of Dhaka Stock Exchange (DSE).
As per the amendment, the Investors' Protection Fund will be managed by a separate trustee board comprising an independent chairman, two directors of the premier bourse and its managing director and a representative of institutional investors.
The revenue of the Investors' Protection Fund will come from the penalty of settlement failure, over-the-counter (OTC) market, companies' listing fees, brokerage commission and TREC (trading right entitlement certificate) holders.
The securities regulator will appoint the chairman of the trustee board from among the names to be submitted by the DSE.
The members of the trustee board will enjoy a reasonable honorarium.
The DSE officials said the funds which have been collected so far for investors' protection is above Tk 62.1 million.
"The size of the fund will increase day by day based on contribution of the relevant sectors," a DSE official said.
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