Thursday, 29 September, 2022

2 lakh BO accounts closed in July

  • Special Correspondent
  • 16 August, 2022 12:00 AM
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2 lakh BO accounts closed in July

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A total of 200,000 active beneficiary owner (BO) accounts were shut down in July due to multiple reasons, including non-payment of account maintenance fees.

The number of active BO accounts came down to around 18.33 lakh from 20.53 lakh in July 31, according to data of the Central Depository Bangladesh Limited (CDBL).

According to CDBL officials, most of the accounts were closed last month due to non-payment of maintenance fees. Fee defaulters' BO accounts are usually closed during July 1-31.

The BO account which is closed once is not reopened later, said the official.

Marginal investors is facing major loss in the market due to recession in couple of months in the market, an investor said, so they may not interested to update their BO accounts through payment of fees. 

In 2016, Bangladesh Securities and Exchange Commission (BSEC) reduced the renewal fee to Tk 450 from Tk 500 for each BO account with a view to reducing the financial burden on investors.

Of Tk 450, Tk 200 goes to the public exchequer, Tk 100 to depository participants (DPs), Tk 100 to the CDBL and the remaining Tk 50 to the BSEC.

Previously, most investors opened BO accounts only to apply for IPO (initial public offering) shares.

The market operators said a large number of BO accounts were closed gradually as the previous scope of getting more IPO shares through having more has been narrowed day by day following regulatory decisions, including allotment of IPO shares on pro-rata basis.

The securities regulator also introduced the provision of having mandatory investments in listed securities as a requirement for investors applying for IPO shares.

Previously, general investors and the NRBs were required to have a minimum investment worth Tk 20,000 in listed securities to apply for IPO shares.

On June 8, 2022, the securities regulator extended the investment ceiling to Tk 50,000 for general investors, and Tk 0.1 million for the NRBs.

The officials of the securities regulator said investment ceiling has been extended to develop long-term investment habits among general investors and ensure that genuine investors get IPO shares.