The securities regulator has decided to double the cash deposit limit by an investor at a brokerage house–in an attempt to increase trading by stockbrokers.
As a result, an investor will be able to deposit Tk10 lakh at a brokerage house in a single day, an increase from the existing Tk5 lakh.
Responding to an application by the DSE Brokers Association of Bangladesh (DBA), and considering the interest of investors, the Bangladesh Securities and Exchange Commission (BSEC) recently decided this, sources said.
BSEC also decided to send a letter to the Bangladesh Financial Intelligence Unit (BFIU) of the central bank to get its opinion on this.
Earlier on August 19, the DBA requested the commission double the cash deposit limit.
DBA President Sharif Anwar Hossain told The Business Standard, "We have heard about the decision but we are yet to receive any formal letter from the regulator in this regard."
He said the trading by brokerage firms will increase.
Meanwhile, officials of the DBA member organisations had an online meeting on Monday with the BSEC Chairman Professor Shibli Rubayat-Ul-Islam about the present capital market situation.
BSEC chairman said in the meeting, "The commission has taken different initiatives for the development of the capital market."
"If the commission completes those initiatives, the capital market will be stable and investors will get back their confidence to invest," he added.
DBA members expressed their views to the chairman about the stock market.
Sources said currently an investor may only submit Tk5 lakh cash at a brokerage house, in a day, to buy securities. This provision has been in effect for many years.
However, it has emerged as an obstacle to the business of investors and brokerage firms, as well as to the development of the stock market, they observed.
Meanwhile, the Bangladesh Bank has already allowed banks to receive a Tk10 lakh deposit from a client in a day.
Stakeholders concerned said as investors fail to purchase their desired shares at a fixed rate in a day, because of the ban on accepting cash in excess of Tk5 lakh, they are growing frustrated and losing their interest in buying shares.
Due to a failure to buy shares as per the demand of investors, the daily turnover of brokerage houses has also reduced. Additionally, brokerage houses' income from the commission on transactions is decreasing.
In this way, both investors and brokerage houses are suffering business losses.