Training programs for all stockbrokers undertaken

The Dhaka Stock Exchange (DSE) has taken the initiative to organize training programs for owners and managers of all stockbrokers to sensitize them on safeguarding investors’ money and shares.

The first DSE exchange developed the training programs following an instruction from the securities regulator in the context of the misappropriation of investors’ money and stocks by three securities brokers.

The Bangladesh Securities and Exchange Commission (BSEC) sent three letters to the DSE on February 10, requesting it to organize separate training programs for all owners and managers of brokerage firms to enhance compliance with securities laws securities in operational activities.

“It has been observed that some brokerage firms are not professionally managed. The DSE is conducting training programs to make the firms more accountable in guaranteeing investors’ money and stocks,” Mr. Shaifur Rahman Mazumdar, Chief Operating Officer at DSE.

He said that the main exchange will organize the first training program for the brokerage compliance authority, which includes the managing director and managing directors, within a week or two.

The securities regulator has also required companies holding TREC (Trading Right Entitlement Certificate) to organize training programs for their employees.

In its letters, the securities regulator also defined the topics of awareness programs to be held for owners, managers and employees of brokerage firms.

The commission instructed the DSE to take initiatives to organize outreach programs for the chairman, chief executive officer, directors and shareholders of all TREC holder companies for the benefit of investors and the development of the capital market. .

The theme of the outreach program will be ‘strengthening fund securities and investor securities’.

Given the maintenance of health precautions related to Covid-19, the DSE was asked to limit the number of participants to 100 for each session.

Currently, there are 308 stock brokers, including 58 new ones, in the first exchange. Of the 58 new brokers, six started operations recently.

Three brokerage firms – Tamha Securities, Crest Securities and Banco Securities – have recently embezzled a large sum of money and stocks from their clients.

Apart from the misappropriation of shares, Crest Securities misappropriated client funds worth Tk 280 million, Banco Securities Tk 280 million and Tamha Securities about Tk 720 million, according to DSE information.

The DSE suspended the transactions of these companies as well as their DP (depository participant) licenses.

The Bangladesh Financial Intelligence Unit (BFIU) has also frozen the bank accounts of companies and their owners.

Of the three brokerage firms, Tamha Securities misappropriated clients’ money and stocks using duplicate back-office software.

At the same time, the DSE formulated uniform guidelines for the back-office services provided by software companies.

If the guidelines are enacted, software vendors will have to provide uniform back-office services for stockbrokers.

Publishers wishing to develop the back offices of brokerage firms will also need to be registered with the DSE after fulfilling specific criteria set to provide back office services.

And a stockbroker will need to obtain stock exchange approval before appointing a provider for back-office services.

The main purpose of the introduction of the back office guidelines is to ensure unaltered reports on the position of investors’ money and stocks held by securities brokers.

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Dolores W. Simon