Sinha Securities' operations suspended from Sunday
The Bangladesh Securities and Exchange Commission (BSEC) has suspended the operations of Sinha Securities Limited – a member firm of the Dhaka Stock Exchange (DSE) – from Sunday until further notice.
The brokerage firm's Depository Participant (DP) registration certificate expired on 29 April this year, and the commission did not renew the certificate because of a deficit in the company's consolidated customers' account.
Sinha Securities operates around 5,000 beneficiary owners (BO) accounts.
Mohammad Mahabubul Alam, accounts manager at Sinha Securities, told The Business Standard, "We received the regulator's order through mail."
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"The company has recently had some deficit in its consolidated customers' account. But, the management will solve the issue shortly, and hopefully our clients will be able to transact from Sunday morning," he added.
According to the DSE, the company made a deficit several times from March this year. As per the latest report, the company's deficit in its consolidated customers' account stood at Tk82 lakh, which it hasn't been able to fill up.
BSEC sources said the commission is planning on forming an inquiry committee to try and find out why Sinha Securities has not been able to fill up its deficit.
They said the brokerage firm has not complied with the regulatory requirements for a long time.
The firm owed the Central Depository Bangladesh Limited (CDBL) Tk3.06 crore, which it has finally paid off through 12 instalments.
Sinha Securities started operations in 1995. The company has 11 branches with four main extension offices.
It executes trades at the DSE on behalf of its clients and provides them with other support such as research materials, margin facilities, statistics, and strategic planning.
In 2019, 2020, and 2021 the capital market experienced four major incidents of investors' funds and securities embezzlement by brokerage firms.
Shah Mohammad Sagir & Co Ltd embezzled Tk14 crore in October 2019; Crest Securities Tk79 crore in June 2020; Banco Securities Tk116 crore in June 2021; and Tamha Securities Tk137 crore in November 2021.
The four main non-compliances brokerage firms usually make are deficit in consolidated customers' accounts, deficit in clients' securities, use of duplicate or multiple back office softwares, and unauthorised use of Trader Workstation.
