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Opening of BO accounts below expectation

121,386 accounts opened in nine months

FE Report | May 30, 2018 00:00:00

About 121,386 beneficiary owner (BO) accounts were opened in last nine months, according to a stock market depository service provider.

Data available with the Central Depository Bangladesh Limited (CDBL) shows the number of active BO accounts was 2,662,880 as of August 31, 2017.

The BO accounts opened in the list nine months pushed up the total number above 2.78 million as of May 29 last.

Stock brokers said the rate of opening new BO accounts was not up to the mark in the last nine months.

It happened because of the cut in the IPO (initial public offering) quota for general investors, they stated.

The IPO quota has been reduced in the revised public issue rules.

Women own around one-fourth of the total number of BO accounts found active until Tuesday.

The number of active BO accounts owned by males is above 2.03 million.

Women and companies own 737,043 and 12,242 BO accounts respectively.

A senior official at a leading brokerage firm said, "Most BO accounts of general investors are normally used in applying for IPO shares."

"Why will they maintain a number of accounts amid the slim chance of getting IPO shares?" he added.

Under the revised fixed price method, general investors are eligible to apply for 50 per cent of the shares of a company going public.

Previously, the general investors were able to apply for 80 per cent of the shares.

Under the book building method, general investors can apply for only 30 per cent of IPO shares.

The number of active BO accounts was 2,926,932 as of June 30, 2017.

Later in the next two months, about 264,052 active accounts were closed due to non-payment of annual account maintenance fees.

When it comes to accounts holding securities, they are suspended instead of closure.

Such accounts are reactivated, when the account holders deposit the annual fees.

A BO account holder has to deposit Tk 450 per year as the maintenance fee.

Of Tk 450, Tk 200 goes to the public exchequer, Tk 100 to the depository participants, Tk 50 to the securities regulator and the remaining Tk 100 to the CDBL.

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