Investors have sent a legal notice to the Bangladesh Securities and Exchange Commission (BSEC) following a recent slump in the stock market caused by the news of margin loan closure in the insurance sector by some of the top brokerage houses.
Supreme Court lawyer Barrister Saiful Alam Chowdhury has issued the notice, where the chairman of the regulatory body was made a respondent.
After several brokerage houses cancelled the facilities of margin loans in the insurance sector on Monday (October 12), the market index witnessed a sharp fall. As a result, general investors suffered when the news broke, especially those in the insurance business.
"These brokerage firms have stopped margin loans without any prior notice, affecting the entire market," Barrister Saiful told The Business Standard, adding, "I have sent a legal notice on behalf of the general investors. I hope the BSEC will take necessary initiatives to address the issue."
Regarding margin loan, BSEC Executive Director and Spokesperson Mohammad Rezaul Karim said, "The commission has not made any decision yet. However, a house can decide whether to give a margin loan or not. They may retreat if they consider it risky."
On Monday, Dhaka Stock Exchange's (DSE) main index DSEX lost 124.74 points, while the market capitalisation dropped 2.49% to Tk392,613 crore following the trend.