BSEC orders flurry of actions on back-office software use
The Bangladesh Securities and Exchange Commission (BSEC) on Sunday directed the bourses to take an array of actions on the use of back-office software by brokerage firms.
The directives, to be implemented within 30 June this year, have been issued to protect the interest of investors, the regulator said in a letter to the Dhaka Stock Exchange (DSE) and the Chattogram Stock Exchange (CSE).
The move comes in the wake of the revelation of a defrauding scheme using multiple back-office software by brokerage firm Tamha Securities.
Keep updated, follow The Business Standard's Google news channel
In its letter, the regulator directed the stock exchanges to ask for explanations from brokerage firms that are using more than one back-office software. In addition, the bourses are to conduct spot inspection of the firms followed by necessary action for the enlistment of back-office software suppliers.
According to the regulator's instructions, vendors will have to obtain permission from the stock exchanges before supplying software to any brokerage firms from now on. The stock exchanges must inform the commission after permitting a vendor.
The DSE and CSE have also been instructed to frame policies for hardware and software installation, security and network installation for the brokerage firms.
The bourses will further take necessary actions to formulate a backup policy for preserving daily trade data of brokerage firms and merchant banks in a separate seismic zone.
Sources said 19 firms supplied back-office software among the member firms of the stock exchanges.
But the country's premier bourse currently has no specific data on how many firms use such multiple software, according to M Shaifur Rahman Mazumdar, chief operating officer of the DSE.
According to sources, Tamha Securities defrauded its investors by illegally using back-office software that provided fake information on their investment status.
In the last two years, four brokerage firms allegedly embezzled around Tk300 crore in different ways from the investors. Of these, Tamha securities embezzled Tk140 crore, Banco Securities Tk70 crore, Crest Securities Tk80 crore, and Shah Mohammad Sagir and Co Tk13 crore.
