BO account renewal fee to be cut by Tk 50 [ Tritiyo Matra News ]

BO account renewal fee to be cut by Tk 50

Local July 04, 2016

The Bangladesh Securities and Exchange Commission has decided to reduce by Tk 50 beneficiary owners’ account annual fee the Central Depository Bangladesh Limited gets from the stock market investors.
The stock market regulator has also decided to lower other CDBL charges.
As per the BSEC decision, annul BO account renewal charge will be Tk 450 from Tk 500.
Of the amount, the CDBL will get Tk 100. Currently it gets Tk 150. The BSEC will get as usual Tk 50, the government Tk 200 and the depository participant Tk 100.
The decision came from a recent commission meeting presided over by its chairman M Khairul Hossain.
The meeting also decided that the CDBL would send SMS [short message] to investors free of cost against every transaction.
The BSEC took the steps following repeated pressure from the Dhaka and Chittagong stock exchanges for reducing their cost burden amid the ailing condition of the market and sluggish turnover since the market crash in 2010-11.
Under the move, the commission drafted some amendments to the schedule 4 of Depository Regulations, 2003. Proposed amendments will be published in the national dailies for public opinions, a recent BSEC news release said.
The amendments, however, are yet to be published.
As per the BSEC proposals, the charge on transactions worth Tk 1 lakh of shares and units of closed-end mutual funds should be Tk 12.50 instead of the current Tk 25.
Despite the legal rights to charge Tk 25, the CDBL is charging Tk 15 at present.
Brokerage houses and merchant banks will be the main beneficiaries of such fee cut, BSEC officials said.
Reduction of investors’ cost burden depends on brokerage houses and merchant banks not the fee cut as they charge investors at 0.35-0.50 per cent of total transaction value irrespective of number of trades, they said.
‘Stocks will be categorised in six segments — equity, shares of companies to be listed with the proposed small capitalised companies’ board, exchange traded fund, corporate bond, open-end mutual fund and government securities,’ BSEC executive director Saifur Rahman told New Age elaborating changes to be made in the rules.
Fees on transaction of each lakh (value) of shares of companies to be listed with the small capitalised companies’ board will be Tk 3, Tk 15 for open-end mutual funds, Tk 10 for government securities and Tk 25 for corporate bond transactions, while transactions of ETF will remain fully free for market makers and authorised participants, he said.
The commission also proposed scrapping minimum fee on share transaction which is Tk 5 in the existing rules.
The changes will be finalised by August or September this year, the BSEC ED said.
A DSE director told New Age that the proposed amendments to the CDBL charges would give some breather to the brokerage houses as they were struggling to survive since the market crash due to a poor turnover at the bourses.
The Dhaka Stock Exchange after the launch of new trading system in December 2014, scrapped howla charge, charge per trade, to reduce trading cost burden on investors as the cost rose after the introduction of the lot-free trading system at the bourse on December 11.
The bourse, however, then increased its transaction charge — laga charge — by 0.01 per cent to 0.03 per cent of total transaction made by an investor to keep its earnings unchanged.
Since April 1, 2010, the DSE has been collecting at 0.02 per cent of total transaction value as laga charge from the brokerage houses along with Tk 2 as howla charge on per trade.