Bangladesh's securities regulator plans to raise minimum capital requirements for merchant banks and require full-fledged stockbrokers to maintain a minimum capital of 150 million taka, The Daily Star reported, citing the regulator's draft rules.
The Bangladesh Securities and Exchange Commission, or BSEC, will soon issue the rules to require merchant banks to increase their minimum capital to 350 million taka from 250 million taka. Full-fledged stockbrokers will be required to have minimum capital of 150 million taka. The BSEC will give stockbrokers and merchant bankers a deadline of two years to raise their capital base to the required level.
If the new rules are implemented, at least 80% of the stockbrokers would have to raise their capital, a senior BSEC official told the publication, adding that brokers want the implementation time to be extended to at least five years.
According to the draft rules, general stock brokers and margin financers will be required to maintain minimum capital of 50 million taka each, while wholesale traders and stock dealers will be required to have capital of 30 million taka and 20 million taka, respectively.
Similarly, underwriters and portfolio managers will be required to maintain 150 million taka each as base requirement, while issue managers and proprietary fund managers should maintain 50 million taka each as the base capital requirement. Institutional portfolio managers will have to hold an additional 20 million over the base requirement.
Under the proposed rules, asset managers and mutual fund managers will have to keep minimum capital of 100 million taka or 50 million taka over the initial paid-up capital, whichever is higher.
The new rules will also require all the registered entities to submit a report to the regulator within 15 days at the end of a month or a quarter, containing comparison statement of comprehensive income, a summary of bank loans and advances, among others.
As of March 8, US$1 was equivalent to 83.18 Bangladeshi taka.
