SEC raises brokers' trade exposure limit
FE Report | Wednesday, 2 July 2008
The Securities and Exchange Commission (SEC) Tuesday raised trade exposure limit for the brokers to encourage them to increase share trading in their respective companies.
The SEC raised the member's margin considering the present huge trade volume in the bourses and also to encourage them for share trading, sources said.
From henceforth, the free limit per trading day for the brokers shall be Tk 50 million or four times of paid up capital of a brokerage house from existing Tk 10 million, a SEC spokesman told reporters after a 'commission meeting'.
The SEC also approved the initial public offering (IPO) of Northern General Insurance Company Ltd for raising Tk 90 million from the capital market.
"Of the two options, the lower will be fixed as trade exposure limit for a broker,' said Farhad Ahmed, executive director of the commission.
The members margin means total buys and total sales position of a member at any point of time during a trading day.
The "free limit" means the amount of the aggregate (gross) trade exposure for each member and "member's margin" means the margin deposited by a member with the clearing house of the bourses.
Farhad said, the brokers are allowed to trade without depositing any margin to the bourses upto trade exposure limit. They have to deposit margin at certain rates if transaction value crosses the limit in their respective firms.
As on December 31, 2007, net asset value of Northern General Insurance is Tk 152 and its earnings per share (EPS) is Tk 20.00.
The company will offer 0.9 million primary shares with the face value of Tk 100 per share. The credit rating for long term is BB-.
Prime Finance and Investment Limited is the issue manager of the insurance company.
As per securities rules, after getting approval, the prospectus of the company will be published within 25 days.
A total of 35 insurance companies are now listed on the Dhaka Stock Exchange.
The SEC raised the member's margin considering the present huge trade volume in the bourses and also to encourage them for share trading, sources said.
From henceforth, the free limit per trading day for the brokers shall be Tk 50 million or four times of paid up capital of a brokerage house from existing Tk 10 million, a SEC spokesman told reporters after a 'commission meeting'.
The SEC also approved the initial public offering (IPO) of Northern General Insurance Company Ltd for raising Tk 90 million from the capital market.
"Of the two options, the lower will be fixed as trade exposure limit for a broker,' said Farhad Ahmed, executive director of the commission.
The members margin means total buys and total sales position of a member at any point of time during a trading day.
The "free limit" means the amount of the aggregate (gross) trade exposure for each member and "member's margin" means the margin deposited by a member with the clearing house of the bourses.
Farhad said, the brokers are allowed to trade without depositing any margin to the bourses upto trade exposure limit. They have to deposit margin at certain rates if transaction value crosses the limit in their respective firms.
As on December 31, 2007, net asset value of Northern General Insurance is Tk 152 and its earnings per share (EPS) is Tk 20.00.
The company will offer 0.9 million primary shares with the face value of Tk 100 per share. The credit rating for long term is BB-.
Prime Finance and Investment Limited is the issue manager of the insurance company.
As per securities rules, after getting approval, the prospectus of the company will be published within 25 days.
A total of 35 insurance companies are now listed on the Dhaka Stock Exchange.