Deficit in consolidated account: BSEC fines Gateway Equity Services
In case of failure to pay the fines, the brokerage firm will have to pay Tk10,000 per day
The Bangladesh Securities and Exchange Commission (BSEC) has fined Tk5 lakh to Gateway Equity Services, a brokerage firm engaged in buying and selling shares, for violation of several securities rules.
In an inspection, a team of the Dhaka Stock Exchange (DSE) found a Tk1.47 crore deficit in the consolidated customers' account (CCA) till 12 September 2023, and it did not maintain its stock investment positions properly.
Also, despite having a deficit in CCA, the brokerage has shown manipulated information in the account, which is a violation of securities rules.
So, as a part of enforcement actions, the BSEC imposed the fine on Gateway Equity Services and directed it to pay the fines within 30 working days.
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In case of failure to pay the fines, the brokerage firm will have to pay Tk10,000 per day, said an order of the commission, which has been published on its website.
According to the order, the DSE's monitoring and compliance department submitted a report on Gateway Equity Services after inspecting the brokerage firm. The team had found the deficit in its CCA but the firm showed surplus funds in the account manipulating bank data.
By not maintaining sufficient funds for customers in the CCA of the company and providing manipulated data, the brokerage firm violated the securities and exchange ordinance, rules and stock-dealer, stock-broker and authorised rules of the commission.
In another violation, the DSE found stock positions of its clients were not maintained properly, which is a violation of the depository rules and securities and exchange rules of 2020.
For violating the securities rules, on 6 February, the commission called Gateway Equity Resources, and its concerned officers at the hearing.
At the hearing Sanjid Hasan, accounts in charge of the company, presented his comments to the commission where he said that due to the floor price, they could not sell the shares properly, due to which the company lost money.
"To recover the losses, we used the company code for share buy and sell transactions and utilised the CCA account. Later, after inspection, we surplus the CCA properly," he added.
Hearing the comments, the commission said the presented allegations against Gateway Equity were right, so the explanations were not accepted, the order further stated.
"Owing to the failure to comply with the securities rules, it is necessary and expedient to punish the institution with a financial penalty in the interest of the capital market, transparency, and public interest," the order reads.
Meanwhile, the commission has also fined Tk1 lakh to Hillcity Securities as it also violated securities rules.
An inspection report of the Chittagong Stock Exchange (CSE) found, that the brokerage firm transferred an aggregate balance of Tk19.05 lakh to a single code from different clients on 8 June 2022 instead of carrying out the transactions through account payee cheque, payment order or bank draft or any other mode of banking channel or systems as approved or recognised by the Bangladesh Bank.
The commission has directed the company to pay the fines within 30 working days.
