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82,668 BO accounts closed in one and a half months

FE Report | July 20, 2022 00:00:00

A total of 82,668 active BO (beneficiary owner) accounts were shut down in nearly one and a half months due to multiple reasons, including non-payment of account maintenance fee.

The number of active BO accounts came down to around 1.99 million on Monday from 2.08 million on June 6, according to data of the Central Depository Bangladesh Limited (CDBL).

Asked, a senior official of the CDBL said most of the accounts were closed this month due to non-payment of maintenance fee. Fee defaulters' BO accounts are usually closed during July 1-31.

The BO account which is closed once is not reopened later, said the official.

In 2016, Bangladesh Securities and Exchange Commission (BSEC) reduced the renewal fee to Tk 450 from Tk 500 for each BO account with a view to reducing the financial burden on investors.

Of Tk 450, Tk 200 goes to the public exchequer, Tk 100 to depository participants (DPs), Tk 100 to the CDBL and the remaining Tk 50 to the BSEC.

Previously, most investors opened BO accounts only to apply for IPO (initial public offering) shares.

The market operators said a large number of BO accounts were closed gradually as the previous scope of getting more IPO shares through having more has been narrowed day by day following regulatory decisions, including allotment of IPO shares on pro-rata basis.

The securities regulator also introduced the provision of having mandatory investments in listed securities as a requirement for investors applying for IPO shares.

Previously, general investors and the NRBs were required to have a minimum investment worth Tk 20,000 in listed securities to apply for IPO shares.

On June 8, 2022, the securities regulator extended the investment ceiling to Tk 50,000 for general investors, and Tk 0.1 million for the NRBs.

The officials of the securities regulator said investment ceiling has been extended to develop long-term investment habits among general investors and ensure that genuine investors get IPO shares.

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