New margin rules gazetted: Existing cases to follow old regulations
Although the new rules have come into effect, any actions, cases, or legal proceedings initiated under the previous margin rules will continue without interruption
The Bangladesh Securities and Exchange Commission (BSEC) has officially repealed the "Margin Rules, 1999" and replaced them with the newly issued "Bangladesh Securities and Exchange Commission (Margin Repeal) Rules, 2025."
The government published a gazette notification today (6 November), confirming that the new regulations received approval from the commission on 30 October.
According to the gazette, although the new rules have come into effect, any actions, cases, or legal proceedings initiated under the previous margin rules will continue without interruption.
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These proceedings will remain valid and will be resolved under the provisions of the 1999 rules.
Until the new regulations are fully enforced in every aspect, ongoing legal activities will be governed by the old guidelines to prevent legal complications and ensure investors' protection.
Earlier, BSEC published a draft of the new rules and invited public feedback until 3 September.
Under the proposed criteria, investors must maintain an average annual investment of at least Tk5 lakh to be eligible for margin loans. Students, homemakers, and retired individuals – who typically do not have a steady income – will not qualify for margin financing due to the associated financial risks.
The new rules specify that margin loans can only be used to purchase shares. Cash withdrawals or transferring funds are prohibited. Investors with portfolios valued between Tk5 lakh and Tk10 lakh will receive margin at a 1:0.5 ratio, while portfolios exceeding Tk10 lakh will qualify for a 1:1 ratio. Margin facilities cannot be availed based on unrealised gains.
Additionally, only companies with a minimum free-float market capitalisation of Tk50 crore will be considered eligible for margin. Shares of companies facing operational suspension, going-concern risks, or bearing qualified audit opinions will remain excluded. Companies under financial distress or uncertainty are also disqualified.
Investors must pay quarterly interest on margin loans, either by cash or by selling shares.
Brokerage firms may issue margin calls if equity falls below required levels and, if necessary, sell shares without prior notice to prevent greater losses.
Market analysts believe that allowing pending cases to continue under existing rules will reduce confusion, limit legal disputes, and strengthen investor confidence – contributing to improved regulatory stability in the capital market.
