The Bangladesh Securities and Exchange Commission (BSEC) has fined two brokerage firms of Chittagong Stock Exchange (CSE) total Tk7 lakh for violating securities law.
Following the 736th commission meeting, BSEC informed that the commission decided to penalize CSE broker DN Securities with Tk5 lakh fine due to the irregularities found by the port-city exchange inspection team in May, 2018.
The team had found that the stockbroker did not provide its clients with trade confirmation note, did not maintain pay-in slip, executed dealer account trades in the same workstation, used consolidated customer account's money to subscribe in primary shares for the firm itself, received cash from clients more than Tk5 lakh at a time instead of check transaction.
On the other hand, Firstlead Securities, the other CSE broker was found in a November 2017 inspection violating securities law in five counts and it will have to pay Tk2 lakh as fine.
CSE inspection team found the firm maintaining no updated account books and other documentation, allowing its authorized representatives trading securities in his own account, running consolidated customer bank account in deficits along with transferring money to own dealer account from the account, and also maintaining more than one consolidated customer bank account— all are violations of rules.
Firstlead Securities also violated the 1987 rule on maintaining risk-based capital adequacy ratio of 1:20 which says a broker's liability should not cross 20 times its capital.
The firm also provided its directors and executives with margin loans, another gross violation of BSEC rule.
The securities regulator is strictly punishing wrongdoers in recent months in the capital market so that investors get back the confidence back on the market.