BSEC decides on 12 subsidiaries of troubled financial institutions

Four allowed to operate, seven given more time to comply

The Bangladesh Securities and Exchange Commission (BSEC) has taken decisions on 12 capital market subsidiaries operating under nine non-bank financial institutions (NBFIs) whose licences are in the process of being cancelled by the central bank.

At an emergency commission meeting held yesterday under the chairmanship of BSEC Chairman Masud Khan, the stock market regulator categorised the subsidiaries based on their financial standing, net asset adequacy and compliance records.

According to a press release, four of the subsidiaries have been allowed to continue their business operations, while seven others have been given until April 30, 2027, to address shortfalls in net assets and ensure full compliance with securities rules and regulations.

The four subsidiaries allowed to continue operations maintained adequate net assets and performed satisfactorily against key evaluation criteria, the release said.

They comprise two stockbrokers -- Premier Leasing Securities Broking Ltd and AVIVA Equity Management Ltd -- and two merchant bankers, PLFS Investments Ltd and Prime Finance Capital Management Ltd.

The seven subsidiaries given the extended deadline comprise four stock brokerages -- Premier Leasing Securities Ltd, International Leasing Securities Ltd, Fareast Stocks and Bonds Ltd, and PFI Securities Ltd. The group also includes two merchant bankers, IL Capital Ltd and GSP Investment Ltd, and one asset management company, Prime Finance Asset Management Company Ltd.

BSEC noted that FAS Capital Management Ltd had been granted a separate deadline of December 31, 2026, to address its net asset deficiencies and meet regulatory requirements.

At the meeting, the BSEC also granted policy approval and decided to issue letters of intent (LOIs) for commodity derivative broker registration certificates to six stock brokerage companies, based on their applications and recommendations from the Chittagong Stock Exchange PLC (CSE). The companies are Sohel Securities, Island Securities, NLI Securities, Be Rich, PHP Stocks & Securities, and UCB Stock Brokerage.

The commission also decided to direct the relevant parties to arrange compensation of up to Tk 5 lakh per investor to settle claims by affected investors through the Dhaka Stock Exchange Investors Protection Fund.

The decision applies to verified and pending claims involving investors of four brokerages: Banco Securities, Tamha Securities, Crest Securities, and Shah Mohammad Sagir & Company.

Recently, the DSE paid up to Tk 5 lakh each to investors affected by the embezzlement at Moshihor Securities.

The regulator also said yesterday that the direct listing rules had been gazetted. Under the rules, companies will be able to list on the stock exchange without going through an initial public offering (IPO), provided they meet the prescribed conditions.

Eligible entities include government enterprises, companies in which the government holds at least 10 percent of the shares, foreign companies, and scheduled banks, financial institutions or insurance companies with a net worth of at least Tk 500 crore.

Companies with annual turnover of at least Tk 1,000 crore may also qualify for direct listing. Any stock exchange, depository, or clearing and settlement company duly registered with the commission is also eligible.