The Bangladesh Securities and Exchange Commission (BSEC) has launched an investigation into the operations of three brokerage firms this month to dig up irregularities involving BO accounts with negative equity.
The firms under regulatory scrutiny are PFI Securities Limited, Premier Bank Securities Limited, and Shyamol Equity Management Limited.
Three officials of the commission have been assigned the task through an internal office order and are required to submit a report within 30 working days.
The investigators will have to identify the number of margin accounts operated by these firms, the number of BO accounts with negative equity, the total amount of negative equity, provision deficits, and unauthorized transactions in margin accounts, according to the order issued on December 11.
The Financial Express saw a copy of the order.
The probe team will also determine the reasons for the increase in negative equity, pinpoint accountability, and assess the brokers' failure to maintain required provisions for unrealised losses.
Moreover, they will find out whether the firms repeatedly violated the commission's instructions to keep provisions for unrealized losses since 2016.
PFI Securities Limited was established in 1997 as a private limited company. It is an associate of Prime Finance and Investment Limited. The firm had faced regulatory actions, including a travel ban on its directors and managing director in September, for embezzling clients' funds. In November, the BSEC suspended PFI Securities' licence renewal due to a deficit of over Tk 28 crore in its consolidated customer account.
Shyamol Equity Management began operations in 1993. Premier Bank Securities is a corporate member of both the Dhaka Stock Exchange and the Chittagong Stock Exchange.
The investigation is expected to shed light on long-standing issues in the brokerage sector and ensure the accountability of brokers and adherence to securities regulations, said the order.
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