Merchant bankers unhappy over SEC order to open separate BO accounts for investors
Friday, 1 January 2010
Kayes M Sohel
The stock market regulator has once again ordered merchant bankers to conduct trading on behalf of their clients under separate BO accounts, instead of the existing omnibus account, in a move to bring transparency in the capital market.
The Securities and Exchange Commission (SEC) has issued the order in line with the merchant banker and portfolio manager rules amended in mid-2008.
Though time was given to comply with the rules, no merchant banks could so far introduce the new BO account system due to operational difficulties since the gazette was issued on June 16, 2008.
An omnibus account allows multiple account holders to do transaction under a single account and identities of the individual account holders are not revealed to the merchant banks.
Merchant bankers raised voice against the SEC order, arguing, "maintaining millions of beneficiary owners (BO) accounts is costly and they may face operational difficulties."
"The order was given aiming to ensure transparency and accountability in the market," Ziaul Haque Khondker, chairman of the SEC, told the FE.
The stock market regulator has once again ordered merchant bankers to conduct trading on behalf of their clients under separate BO accounts, instead of the existing omnibus account, in a move to bring transparency in the capital market.
The Securities and Exchange Commission (SEC) has issued the order in line with the merchant banker and portfolio manager rules amended in mid-2008.
Though time was given to comply with the rules, no merchant banks could so far introduce the new BO account system due to operational difficulties since the gazette was issued on June 16, 2008.
An omnibus account allows multiple account holders to do transaction under a single account and identities of the individual account holders are not revealed to the merchant banks.
Merchant bankers raised voice against the SEC order, arguing, "maintaining millions of beneficiary owners (BO) accounts is costly and they may face operational difficulties."
"The order was given aiming to ensure transparency and accountability in the market," Ziaul Haque Khondker, chairman of the SEC, told the FE.