Investors face problems in complying with SEC order

---

FE Report
General investors and depository participants (DPs) are facing problems in complying with an order issued by the Securities and Exchange Commission (SEC) regarding opening of fresh beneficiary owners' (BO) accounts and updating the existing ones.
As per an SEC directive issued on November 19 last, signature of an applicant must be put on the reverse side of the photograph and the signature should be similar to the one that appears in the bank account form as well as BO account form.
Each BO account holder will also have to collect a certificate from the bank branches concerned under the new system.
The SEC move was taken to prevent opening of fictitious BO accounts.
"But investors allege that many of the bank officials concerned are not assisting them in complying with the latest SEC directive," a DSE brokerage house source said.
The source said bank officials are refusing to offer the certificates saying that they have not received any 'Bangladesh Bank' directive regarding the issue.
When contacted, an SEC source, however, told the FE that the SEC will urge the Bangladesh Bank very soon so that the central bank issues an order to help facilitate the latest SEC move.
The market operators said the DPs will face tremendous load while updating particulars of the existing BO account-holders in line with the latest directive due to lack of adequate support from the Central Depository Bangladesh Ltd (CDBL).
"The CDBL service is now awful and we have to work until 11-00 pm in most of the working days because of frequent disruption at the CDBL end and regularising the existing BO account-holders with the new SEC directive will bring huge burden for the DPs," a DSE source said.
Earlier the SEC at a meeting on October 30 last decided that people interested in opening beneficiary owners' accounts would require submission of certificates from their banks.
The SEC decided to attach more conditions to prevent opening of fake accounts.
The bank certificate, required as per the new directive, would have to contain name of the person interested to open a BO account, his/her father's and mother's names and account number.
Earlier in August, the SEC tightened the rules of opening and maintaining BO accounts, allowing the commission to forfeit the application money of initial public offerings for using fake BO accounts.
'If an applicant submits more than two applications, the whole or a part of application money may be forfeited by the commission, the new rules said adding 'in such cases, all applications will be treated as invalid and will not be considered for allotment.'
As per the rules, an applicant cannot submit more than two applications for IPOs, one in his/her name and another jointly with other person.
Currently, the number of BO accounts, through which investors take part in trading, is around 1.6 million, but most of the accounts are used only to participate in the IPOs, said sources.