SEC takes more steps to check fake BO accounts

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FE Report
The Securities and Exchange Commission (SEC) has sent a letter requesting the Bangladesh Bank to inform all the scheduled commercial banks for providing a certificate that is required to open new beneficiary owners' (BO) account and also for updating the existing one.
The SEC sent the letter Monday when the general investors and depository participants (DPs) were facing problems from the bank branches in complying with an order from the SEC, said a source.
As per an SEC directive issued on November 19 last, signature of an applicant must be furnished at the backside of the photograph and the signature should be similar as it appears in the bank account form as well as BO account form.
Every BO account holder will also have to collect a certificate from the bank branches concerned under the new system.
The latest SEC move was taken to tighten the BO account opening and maintaining system in order to discourage and check fake BO accounts.
Earlier the SEC at a meeting on October 30 last decided that people interested in opening beneficiary owners' accounts would require submitting certificates from their banks.
The SEC decided to put more conditions in opening BO accounts to prevent people from opening 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 will 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.