DPs demand cancellation of advance BO fee
Sunday, 18 July 2010
FE Report
The depository participants (DPs) have demanded of the Securities and Exchange Commission (SEC) and Central Depository Bangladesh Ltd (CDBL) to cancel the latest CDBL directive to pay an advance one year beneficiary owners' (BO) 'annual account maintenance fee'.
The CDBL in a letter recently asked the DPs to pay Tk 500 as fee covering the year July 1,2010 to June 30, 2011.
"Everyday, we are facing investors grievance on the issue and CDBL should cancel the order," a DSE DP said.
The CDBL said that the fee should be paid by July 31.
"It is also not justified that the fee should be deposited within a short period as we received the CDBL directive on July 12," another DSE DP said.
The source said it has become a very vexing duty for the DPs, in addition to their daily routine functions to update the maintenance fee everyday in compliance with the CDBL directive.
Market operators said as the stock market operation has expanded to a large extent during the last few years, the CDBL-related functions should remain easy and hassle-free to serve the investors in an efficient way.
The SEC decided to put more conditions in opening BO accounts to prevent people from opening fake accounts.
Earlier in August of 2007, 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 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 2.6 million but most of the accounts are used only to participate in the IPOs, said sources.
Meanwhile, the DPs have urged the DSE management to place important market information on the website of the bourse.
"Information like CDBL directives on fee deposit should get priority on the DSE website news," DSE members said.
At present, there are 2400 workstations allowed by DSE and DPs and market participants see all the information dessiminated by DSE website.
The depository participants (DPs) have demanded of the Securities and Exchange Commission (SEC) and Central Depository Bangladesh Ltd (CDBL) to cancel the latest CDBL directive to pay an advance one year beneficiary owners' (BO) 'annual account maintenance fee'.
The CDBL in a letter recently asked the DPs to pay Tk 500 as fee covering the year July 1,2010 to June 30, 2011.
"Everyday, we are facing investors grievance on the issue and CDBL should cancel the order," a DSE DP said.
The CDBL said that the fee should be paid by July 31.
"It is also not justified that the fee should be deposited within a short period as we received the CDBL directive on July 12," another DSE DP said.
The source said it has become a very vexing duty for the DPs, in addition to their daily routine functions to update the maintenance fee everyday in compliance with the CDBL directive.
Market operators said as the stock market operation has expanded to a large extent during the last few years, the CDBL-related functions should remain easy and hassle-free to serve the investors in an efficient way.
The SEC decided to put more conditions in opening BO accounts to prevent people from opening fake accounts.
Earlier in August of 2007, 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 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 2.6 million but most of the accounts are used only to participate in the IPOs, said sources.
Meanwhile, the DPs have urged the DSE management to place important market information on the website of the bourse.
"Information like CDBL directives on fee deposit should get priority on the DSE website news," DSE members said.
At present, there are 2400 workstations allowed by DSE and DPs and market participants see all the information dessiminated by DSE website.