BSEC mulls scrapping BO account fees, decides to hold monthly stakeholder meetings

The Bangladesh Securities and Exchange Commission (BSEC) is actively considering scrapping the fees associated with opening and maintaining beneficiary owner (BO) accounts.

The regulator is also considering allowing investors to deposit or withdraw up to Tk5 lakh in cash. Additionally, the BSEC announced that it will hold monthly meetings with all capital market stakeholders to ensure more inclusive and transparent decision-making.

These decisions were made during an emergency meeting convened by the BSEC on Saturday at its office in Agargaon, Dhaka. Representatives from stock exchanges, brokerage firms, and merchant banks participated in the meeting.

During the meeting, BSEC Chairman Khondoker Rashed Maqsood sought immediate and short-term solutions to halt the ongoing market downturn. 

According to a source present at the meeting, a significant portion of the discussion focused on the interest income generated from consolidated bank accounts of investors – specifically, who should benefit from it, why, and what alternatives exist. 

Though the issue had previously been settled, BSEC opted to reopen the discussion, leaving the matter unresolved. 

The source commented that prolonging such a minor issue for years reflects a lack of understanding of the market's core problems.

In response to how investor confidence could be restored quickly, several suggestions were put forward – such as increasing the tax gap between listed and unlisted companies, scrapping capital gains tax, and treating dividend withholding tax as final.

When asked about the meeting's atmosphere, one BSEC official said it was "very cordial," although no concrete solutions emerged. "Previously, the BSEC would act unilaterally without engaging stakeholders. Now it seems they want to change that approach, which is a positive sign," the official noted. 

The BSEC announced it will now meet stakeholders at the end of each month to listen to problems and accept suggestions.

However, one participant, requesting anonymity, said the BSEC chairman cautioned a member of the Merchant Bankers Association for making critical remarks about the market, the regulator, and stock exchanges. 

"The chairman tried to convey that speaking negatively about the market during downturns could further harm investor sentiment," the participant added.

In a press release issued after the meeting, the BSEC stated that Saturday's discussions revolved around the proposals and directives that came from the recent meeting with the chief adviser. 

The key proposals included waiving tax on dividend income up to Tk1 lakh, reducing advance income tax (AIT) on broker turnover, introducing government securities auctions on the stock exchange, and ensuring investor protection in securities houses.

During the meeting, Niranjan Chandra Debnath, managing director of Investment Corporation of Bangladesh (ICB), proposed that mutual funds distribute 80% of their earnings for the current fiscal year as dividends to unitholders.