Written by The Banking Post
The Bangladesh Securities and Exchange Commission (BSEC) has launched investigations into two brokerage firms—Premier Leasing Securities and Green Delta Securities—over alleged irregularities involving negative equity accounts and margin lending.
Separate enquiry teams have been formed and asked to submit reports within 60 working days, signalling a fresh regulatory push to tighten oversight in the capital market.
The probe into Premier Leasing Securities will examine whether the firm declared cash dividends despite persistent negative equity and unrealised losses. Investigators will also assess whether client receivables were improperly treated as assets without adequate provisioning, potentially masking financial stress.
Allegations of margin manipulation are also under review, including converting cash accounts into negative equity accounts and executing trades beyond regulatory limits. The enquiry will further look into missing or incomplete margin agreements and possible violations in block and bulk transactions.
In a parallel investigation, Green Delta Securities faces scrutiny over how it calculated negative equity, including the practice of adding prior-year interest to principal. The regulator will also examine whether required provisions were maintained in line with rules and accounting standards.
Concerns have also been raised about discrepancies in reported figures, the use of rollover practices, and whether interest was charged on negative equity accounts despite restrictions.
Additional issues under review include the transfer of speculative shares into negative equity accounts, extending margin loans to cash accounts in breach of regulations, and opening margin accounts without proper client consent.
The BSEC has also flagged broader governance weaknesses at the firm, including inaccurate reporting, weak internal controls, and accountability lapses at the management and board levels.
The move underscores the regulator’s intensified efforts to address long-standing issues in brokerage operations—particularly around negative equity and margin lending—that have eroded investor confidence in the market.
