The Dhaka Stock Exchange (DSE) has revoked another Trading Right Entitlement Certificate (TREC) licence - SQ Brokerage House Ltd - for violation of trading rules.
The prime bourse on Tuesday announced the regulatory decision on its website, stating that the brokerage firm failed to commence trading activities within the stipulated time.
SQ Brokerage (TREC No. 308) obtained a stock-dealer or stockbroker registration licence from the Bangladesh Securities and Exchange Commission (BSEC) in 2021.
The brokerage firm violated the Bangladesh Securities and Exchange Commission (Trading Right Entitlement Certificate) Rules 2020, which specifies that any brokerage firm must start trading activities within six months of receiving the stockbroker registration certificate.
The trading rule also states that if a brokerage fails to comply with regulations, ignores commission directives, or causes loss to investors' money or interests, the securities regulator may suspend or cancel its trading rights.
The prime bourse also requested that persons having claims against SQ Brokerage House submit their written complaints along with all relevant supporting documents to the DSE by January 6 next year.
In October this year, the DSE canceled the licences of two brokerage firms - Al Haramain Securities and Mahid Securities - due to violations of trading rules.
Al Haramain Securities (TREC No. 263) lost its licence for failing to maintain the required capital. According to the law, a brokerage firm must have a minimum of Tk 50 million as paid-up capital to secure a TREC licence, and the firm is never allowed to have equity capital less than 75 percent of the initial paid-up capital.
Mahid Securities (TREC No. 273) also lost its licence as it failed to obtain stock-dealer or stockbroker registration certificates from the BSEC and failed to commence trading activities within the stipulated time.
In May this year, the DSE also cancelled the TREC licence of Tristar Securities due to the firm's failure to maintain the required capital.
In the past few years, investigations carried out by the securities regulator found evidence of fund misappropriation by brokerage firms.
As a result, the licences of several firms were revoked, including Shah Mohammad Sagir, Crest Securities, Dawn Securities, Tamha Securities, Banco Securities, and Moshihor Securities.
In 2021, the previous BSEC commission, led by Professor Shibli Rubayat-Ul-Islam, allowed licences for 59 new brokerage firms, mostly on political grounds, bringing the total number to 309.
However, new TREC holders are entitled only to buy and sell shares and will not hold shares of the DSE.
Currently, 295 brokerage houses are operating on the prime bourse, while the regulator has suspended trading of four newly licensed brokerage firms as of Tuesday.
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