BMBA agrees to resolve omnibus complexitiesStaff Correspondent
Merchant bankers at a meeting with the Dhaka Stock Exchange on Monday agreed to open separate beneficiary owners’ accounts in names of the clients under omnibus accounts.
At the meeting held at the DSE board room, the bourse formed a committee to facilitate the process.
Md Fayekuzzaman, managing director of Investment Corporation of Bangladesh, will lead the committee and formulate a guideline for incorporating BO accounts into the omnibus accounts.
Existing practice is that clients’ accounts under an omnibus account, a single account which contains multiple investors’ accounts, are identified by code numbers.
‘The committee will submit its report within six months,’ Fayekuzzaman told New Age.
He said other members of the committee would come from Central Depository of Bangladesh Ltd, Dhaka Stock Exchange and Bangladesh Merchant Bankers’ Association.
On Monday, the DSE also decided to launch its online trading system within 10 weeks after missing an earlier deadline of March 25 due to omnibus accounts complexities.
The DSE and the BMBA were at loggerheads over the omnibus issue as the bourse wanted separate BO accounts under an omnibus account while merchant bankers denied doing so.
‘For transparency in the trading system, the meeting has agreed that we need separate BO accounts under an omnibus account,’ DSE president Rakibur Rahman told New Age after Monday’s meeting.
‘The merchant bankers raised some technical issues about incorporating BO accounts into omnibus accounts which we also feel need to be addressed. So, we formed a committee to facilitate the process,’ he said.
The Securities and Exchange Commission on March 1 sat with the DSE and the BMBA to discuss the new trading software of the bourse and the practice of omnibus accounts.
The DSE at the meeting said that the bourse was all set to launch online trading system from March 4, but the new system didn’t have any option to trade through omnibus accounts.
The new software of DSE can only detect a BO account and a client will be allowed to operate under that account.
According to the SEC notification issued on June 16, 2008, the commission amended the Securities and Exchange Commission (Merchant Banker and Portfolio Manager) Rule 1996 with a provision of keeping separate beneficiary owners accounts for clients.
The SEC on several occasions asked the BMBA to provide the details of individual accounts under omnibus accounts to the CDBL. But, the association did not do so saying that it would be time consuming and lengthy process for the merchant banks.
The practice of omnibus accounts was highly criticised by the probe committee that had investigated the 2011 stock market scam.
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