SEC asks brokerage houses to refrain from forced selling

FE Report The securities regulator has expressed its deep concern over the continuous flagging trend of the market and asked the stakeholders to play due roles of institutional investors for the sake of market, officials said. At the same time, the Securities and Exchange Commission (SEC) will hold a meeting tomorrow (Wednesday) with the representatives of Association of Bankers, Bangladesh (ABB) in a bid to stabilise the stock market. "The regulator deeply has been observing the declining trend of the market. It has also talked to higher authorities to revive the market's stability," Mohammad Saifur Rahman, an executive director of the SEC, told the reporters. He said the SEC is going to sit with the ABB in an effort to find out more market supportive measures to bring stability in the market. "At that scheduled meeting, the regulator will put accent on more possible measures, which can be implemented for the sake of better market situation," Rahman said. He said the SEC has asked the banks, stock brokers and dealers to refrain from forced selling considering the miserable situation of general investors and the market as well. "The regulator has strictly ordered different firms to abstain from forced selling," Rahman added. The regulatory caution comes after the investors have raised allegation against some brokerage firms, including HAQ Securities, for forced selling. The clients of HAQ Securities have also filed allegations against the firm to the SEC for selling out clients' shares. The managing director of HAQ Securities Laique Ali Chowdhury dismissed the allegation of forced-selling. "Still now we have not gone for forced-selling," Chowdhury told the FE. The clients of some other brokerage firms have also filed allegations for forced-selling although the finance minister and the securities regulator repeatedly urged the firms related to margin loans for refraining from forced-selling. However, the SEC officials said the regulator would probe into the matter in the light of allegation filed by investors. On Monday, a group of investors called on the SEC Chairman at his office and handed over a list of demands, including the suspension of share trading until a joint effort from all stakeholders is ensured. On the day, the leaders of Bangladesh Merchant Bankers Association (BMBA) held a meeting and decided to submit a list of recommendations regarding market supportive measures to the SEC within one week. "We have also discussed as to how the merchant banks can strengthen their base of capital in an effort to support the stock market," BMBA President Hafiz A Chowdhury told the FE. At the meeting the BMBA leaders also formed two committees to strengthen the activities of merchant banks. The committees are advisory committee and research and development committee.