Freeze on margin loan rules to continue until Dec 31

The stock market regulator has decided to allow the investors, whose equity has turned negative due to margin loan, to continue transactions with their BO account until Dec 31.

The Bangladesh Securities and Exchanges Commission in a meeting on Monday, decided to extend the previous deadline of June 30 by another six months.

In a statement, the regulatory body took into consideration appeals from Dhaka and Chittagong stock exchanges highlighting the interest of the investors and decided to extend the stay on the provisions of clause 3 (5) of the 1999 Margin Rules.

As per the clause, it is mandatory for the investors to maintain equity of at least 150 percent of the debit balance in the margin account.

In case it falls below 150 percent, then additional margin, either cash or securities, will have to be brought in to keep the balance above the limit.

Transactions will not be allowed until the requirement is met.

The clause was frozen in 2013 following demands from investors, who faced losses during the stock market crash after having taken loans to invest in the market.

This allowed investors to continue transactions although their equity turned negative due to margin loans.

Initially the facility was extended until Sep 30, 2013. But subsequently, it was extended a number of times.