The Dhaka Stock Exchange (DSE) has secured approval of the security regulator to issue brokerage licenses, technically called the Trading Right Entitlement Certificate (TREC), to 16 new companies.
The Bangladesh Securities and Exchange Commission (BSEC) issued the approval letter to the managing director of DSE on Monday.
In its letter to the DSE, the commission said that the names of the 16 applicants have been finalised at the first phase of screening.
The 16 companies are- Amar Securities, Bang Ji Geo Textile, Meenhar Securities, Biplob Holdings, Associated Capital Securities, Be Rich, Columbia Share, Rahman Equity, MKM Securities, Smart Share, Benemoy Securities, Relief Exchange, Emperor Securities, NY Trading, B & BSS Trading, Bridge Stock & Brokerage Limited.
Earlier, the commission on May 19 approved 30 new brokerage houses.
Earlier in February, DSE received 66 applications after it invited applications from the interested firms.
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.