The Bangladesh Securities and Exchange Commission (BSEC) directed the Dhaka Stock Exchange (DSE) and Central Depository Bangladesh Limited (CDBL) to inspect seven brokerage firms submitting a report within 20 working days upon receiving several complaints against these firms.
A brokerage firm offers brokerage services in exchange for fees.
These seven firms are Royal Capital Ltd, Sinha Securities Ltd, Globe Securities Ltd, ANF Management Company Ltd, Kabir Securities Ltd, Vanguard Shares & Securities Ltd and Midway Securities Ltd.
A consolidated customer’s account (CCA) is an account that contains deposits containing money of customers with a stockbroker. The account is to be used by the stock broker to deposit money from its customers and pay money to customers.
Brokerage houses can sometimes illegally use money from this account. Any shortfall in this account indicates a diversion of funds by the brokerage firms which is considered a financial crime. An allegation has been made that some brokerage firms use this money for an application of initial public offering (IPO).
A routine inspection can reduce this type of potential scams. Furthermore, an improved digital system with proper monitoring system can prevent this and many other irregularities.The securities exchange commission will be soon bringing CCA account under a digitalised platform.