Suspension timeframe of margin rules provision to be extended

The securities regulator is set to extend further the timeframe of suspension of effectiveness of a provision of margin rules until December 31 next to facilitate the transaction of inactive accounts, officials said.
Earlier, the Bangladesh Securities and Exchange Commission (BSEC) in an order kept effectiveness of the section 3(5) of the Margin Rules, 1999 suspended until September 30 this year, taking the overall market situation into consideration.

The stakeholders, however, made a plea so that the securities regulator extends the timeframe of suspension of effectiveness of section 3 (5) till March of next year.
"The regulator is likely to announce the extension of the timeframe of suspension of the section 3 (5) soon. We think the accounts having negative equity need another breathing space," said a senior BSEC official.
He said due to postponement of the section of margin rules, the lenders will be able to rebalance the negative accounts carrying out the transaction within the extended timeframe.
According to the section 3 (5) of the Margin Rules, 1999, whenever the equity in a client's margin account falls below 150 per cent of the debit balance, the member shall request the client to provide additional margin to bring the equity to not less than 150 per cent.
At the same time, the member shall not permit any new transactions in the margin account unless the resulting equity in the account would not be less than 150 per cent of debit balance.

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