• Wednesday, Nov 30, 2022
  • Last Update : 10:24 am

New rules to get a brokerage licence

  • Published at 04:22 pm November 19th, 2020
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Bigstock

The new license holders will only get a TREC or brokerage license and not any share or membership of the concerned bourse

Local companies must have a minimum Tk 5 crore in paid-up capital and foreign ones Tk 10 crore if they want to buy the brokerage licence, also known as trading right entitlement certificate (TREC) from the country’s stock exchanges.

However, a company formed with local and foreign shareholders can get one with Tk 8 crore in paid-up, as per the gazette notification on November 12.  The new license holders will only get a TREC or brokerage license and not any share or membership of the concerned bourse, said the Bangladesh Securities and Exchange Commission (Trading Right Entitlement Certificate) Rules, 2020.

Earlier, the Dhaka Stock Exchange board had proposed that an applicant should pay Tk 5 crore in registration fee and must have Tk 10 crore in paid-up capital for acquiring TREC.

As per new rules, the local companies have to keep Tk 3 crore, the foreign companies Tk 5 crore and joint venture companies Tk 4 crore in security money with the stock exchanges.

Earlier this year, the BSEC published the draft of the TREC Rules that sparked grumbles from the existing brokerage firms.

At the beginning of each fiscal year, the stock exchange will submit its annual plan for issuing new TREC and also the BSEC can instruct the exchanges in this regard.

The stock exchanges will have to either accept or reject the applications for new TREC within 45 days, as per the new TREC rules.

Currently, there are 250 TREC holders. Of them, 238 are active at Dhaka bourse.

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