The regulator Bangladesh Securities and Exchange Commission (BSEC) has sought a plan from both the stock exchanges (DSE-CSE) on the issue of brokerage house sale or trading right entitlement certificate (Trek) for buying and selling shares and units in the capital market. The DSE and CSE have been directed to submit the plan to the commission within the next 15 days. This information has been known from the relevant sources.
Last Thursday (January 21) BSEC Deputy Director. A letter signed by Saiful Islam has been sent to the managing director of Dhaka and Chittagong Stock Exchanges.
According to the Bangladesh Securities and Exchange Commission (Trading Right Entitlement Certificate) Rules 2020, there is a provision to submit the annual plan for trek issue to the Commission within the first month of the financial year. According to him, BSEC has asked DSE and CSE for an annual plan.
Earlier, DSE and CSE wanted to know whether the annual plan for the trek issue would be submitted to the commission.
The letter directed both the BSEC and the stock exchanges to expedite the track issue process. At the same time, it has been asked to prepare a plan with trek issue for the rest of the current financial year and submit it to BSEC within 15 days.
BSEC Commissioner Prof. Sheikh Shamsuddin Ahmed told the media
that plans have been sought from DSE and CSE to approve the new trek. According to the Trading Right Entitlement Certificate Rules, both the stock exchanges have a provision to submit a specific plan in this regard to the BSE within the first month of the beginning of each financial year. However, since the rules were finalized in November last year, plans for the broken year have been sought from both stock exchanges.
Meanwhile, after receiving the letter, DSE and CSE have started planning for the trek issue. The plan is prepared and with the consent of the Board of Directors, it will be submitted to the BSEC by both the stock exchange authorities. DSE and CSE are planning to submit the trek issue plan to BSEC by January 31.
DSE Acting Managing Director (MD) and Chief Financial Officer (CFO) Abdul Matin Patwari told PTI that he
received the letter from BSEC on Sunday. We have been given 15 days. We are developing guidelines for approving new treks. We will submit the plan within the stipulated time.
It is learned that in the light of DSE’s objection, the previous commission did not complete the formulation of trek rules and passed it to the next commission. Then the commission headed by Professor Shibli Rubaiyat-ul-Islam finalized the trek rules and published the gazette on November 12 last year.
The Trading Right Entitlement Certificate Rules state that any company, statutory body or any entity approved by the Commission may purchase the track of the stock exchange. To get this trek, you have to apply at the exchange with a fee of Tk 1 lakh. And 1 crore rupees has to be paid as registration fee.
The rules require a paid up capital of at least Tk 5 crore to take the trek. Besides, a security deposit of Tk 3 crore has to be paid at the stock exchange. However, in case of joint trekking with foreigners, the paid up capital is Tk 6 crore and in case of foreigners alone, Tk 10 crore has been mentioned. In the case of bail, Tk 4 crore has been earmarked for trekking with foreigners and Tk 5 crore for foreigners only. And the annual fee of the trek is 1 lakh rupees.
In addition, for the issue of Exchange Trek Certificate, two daily (English and Bengali) newspapers and on the Exchange’s website, a notification has to be given to apply for a new Trek Issue. Additional information and documents need to be submitted in support of the information mentioned in the exchange form. The exchange will then issue the track if it is thoroughly checked and selected to qualify for the track. Otherwise it will be denied. In addition, if a trek loses eligibility or violates any of the terms of these rules, the Exchange may revoke its certificate.
Within one year of re-registration, the certificate of stock-dealer or stock-broker has to be obtained as per the Securities and Exchange Commission (Stock Dealer, Stock Broker and Authorized Representative) Rules 2000. Failure to start business within 6 months of receiving this certificate will result in cancellation of the track.