The securities regulator has increased the minimum investment limit from Tk20 lakh to Tk30 lakh for an investor to be qualified for trading shares of companies on the Small Capital Platform or the SME board of the exchanges.
The Bangladesh Securities Regulator and Exchange Commission (BSEC) took the decision on Wednesday in a meeting, which will be effective immediately.
The commission has given three months to the investors who are already trading shares on the SME board with a portfolio of Tk20 lakh to increase their investment to Tk30 lakh.
In order to be considered eligible for trading shares in the Small Capital Platform launched in 2021, initially there was an obligation to invest Tk1 crore in the shares of listed companies in the capital market.
At that time eligible investors had to express their interest in trading in small caps by filling up a number of forms.
The Small Capital Platform has not been very popular due to capital crunch and a low number of investors.
Later, the process of trading shares on the Small Capital Platform was simplified and the investment limit was reduced to Tk50 lakh.
As the investors did not show much interest even after those measures, the minimum investment limit was further reduced to Tk20 lakh.
While the Russia-Ukraine war and the continued sell-off of the dollar led to a bear market, the price growth and trading of small capital companies' shares was noticeable.
Some investors have alleged that the number of small-cap stocks is low and the business condition is not good, but the share prices of some small-cap companies have increased several times due to manipulation. After that, the commission took the new decision.