Calendar year-long BO account maintenance period demanded
Wednesday, 26 November 2008
FE Report
Depository participants (DPs) have demanded that the Securities and Exchange Commission (SEC) and the Central Depository Bangladesh Ltd (CDBL) set the period of January 1 to December 31 as the beneficiary owners' (BO) annual account maintenance fee' period.
"Under the present accounting period from October to September, we are facing tremendous problems as the DPs have to pay the maintenance fees of investors in advance to the CDBL," a leading brokerage house source told the FE.
The source also said it has become a very vexing duty for the DPs, in addition to their daily routine work, to update the maintenance fees everyday in compliance with the CDBL directive.
"So the vexation could be largely reduced, if the period of January 1 to December 31 is fixed as the Annual Account Maintenance Fee period every year," the source added.
Market operators said as the stock market operation has expanded to a large extent over the last few years, the CDBL-related work should remain easy and hassle-free, so that the investors can be served in an efficient way.
The SEC has decided to set more conditions for opening BO accounts to prevent people from opening fake accounts.
Earlier in August last year, 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 money will be forfeited by the commission, the new rules said. 'In such cases, all applications will be treated as invalid and will not be considered for allotment.'
As per rules, an applicant cannot submit more than two applications for IPOs, one in his or her name and another jointly with any 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 IPOs, said sources.
Depository participants (DPs) have demanded that the Securities and Exchange Commission (SEC) and the Central Depository Bangladesh Ltd (CDBL) set the period of January 1 to December 31 as the beneficiary owners' (BO) annual account maintenance fee' period.
"Under the present accounting period from October to September, we are facing tremendous problems as the DPs have to pay the maintenance fees of investors in advance to the CDBL," a leading brokerage house source told the FE.
The source also said it has become a very vexing duty for the DPs, in addition to their daily routine work, to update the maintenance fees everyday in compliance with the CDBL directive.
"So the vexation could be largely reduced, if the period of January 1 to December 31 is fixed as the Annual Account Maintenance Fee period every year," the source added.
Market operators said as the stock market operation has expanded to a large extent over the last few years, the CDBL-related work should remain easy and hassle-free, so that the investors can be served in an efficient way.
The SEC has decided to set more conditions for opening BO accounts to prevent people from opening fake accounts.
Earlier in August last year, 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 money will be forfeited by the commission, the new rules said. 'In such cases, all applications will be treated as invalid and will not be considered for allotment.'
As per rules, an applicant cannot submit more than two applications for IPOs, one in his or her name and another jointly with any 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 IPOs, said sources.