Dhaka bourse gets 30 new brokers, another 21 on the way 

The Dhaka Stock Exchange (DSE) has secured approval of the securities regulator to issue brokerage licenses to 30 new companies.

The Bangladesh Securities and Exchange Commission (BSEC) issued the approval letter to the managing director of DSE on Tuesday.

The commission, in its letter to the DSE, said the names of the 30 applicants have been finalised at the first phase of screening.

The firms are: Kabir Securities, Monarch Holdings, Sohel Securities,  RAK Capital, Jamuna Bank Securities, Snigdha Equities, International Securities Company, South Asia Securities, Tristar Securities, 3i Securities, Sonali Securities, KDS Shares and Securities, Al Haramain Securities, Mir Securities, TK Shares and Securities, NRB Bank Securities, SBAC Bank Investment, Amaya Securities, Prudential Capital, Takaful Islami Securities, BNB Securities, Agrani Insurance Securities, Mahid Securities, Baraka Securities, ANC Securities, SFIL Securities, Tasia Securities, Dynasty Securities, Celestial Securities, and Trade X Securities.

At a board meeting on Wednesday, DSE approved the proposal to issue the 30 firms their brokerage licenses, technically called the Trading Right Entitlement Certificate (TREC) license.

Also, another 21 of 51 eligible applicants are under further scrutiny of BSEC which is to later provide updates in this regard, according to their letter.

The 21 pending eligible applicant firms are: Amar Securities, Bang Jin (BJ) Geo Textile, Wings Fin, Meenhar Securities, Biplob Holdings, Associated Capital Securities, Be Rich, Far East Shares and Securities, Columbia Shares and Securities, Rahman Equity Management, Trust Regional  Equity, NC Securities, MKM Securities, HSB Securities, Smart Share and Securities, Innova Securities, Benemoy Securities, Relief Exchange Limited, Emperor Securities and Wealth Management, Mirpur Securities, and DP7 Limited.

Earlier in February, DSE invited applications from firms interested in being a DSE broker. The stock exchange received 66 applications.

The 66 applications did not contain any foreign firm as expected by the regulator and industry professionals. However, a joint venture firm applied, but the DSE found it ineligible.   

Finally, the DSE found 51 firms eligible and forwarded their names to  BSEC in late April.

Currently, of the 250 DSE TREC holders, 236 are active and each of the existing TREC holders is also a member and shareholder of the stock exchange company. 

In recent years, BSEC felt that the brokerage industry needs to expand and be more competitive. Last year, it came up with rules to allow non-member firms in the brokerage business.

The brokerage industry was initially concerned about new entrants, as  existing firms were struggling to survive in a decade-long depressed market.

However, the concern seems to be no more, thanks to BSEC setting a higher entry barrier in terms of financial and other eligibility criteria and also, the stock market being in a bull run for a year.

The Chittagong Stock Exchange is also in a similar process of issuing new brokerage licenses to eligible firms that would not be shareholders of the exchange.