Government sets Tk 500,000 floor, one-year rule for margin loans

The new policy replaces the taskforce’s earlier proposal of Tk 1 million investment and six months’ experience

Investors in Bangladesh’s secondary capital market will no longer be eligible for margin loans unless they have at least one year of trading experience and a minimum investment of Tk 500,000, under new regulations issued by the government.

The Bangladesh Securities and Exchange (Margin) Rules, 2025 were gazetted on Thursday, taking immediate effect.

According to the regulations posted on the Bangladesh Securities and Exchange Commission (BSEC) website, “No client shall be granted margin financing unless they maintain an average investment of at least Tk 500,000 over one year.”

The rules also specify that no asset other than margin-financeable securities may be kept in accounts funded through margin loans.

Earlier, a taskforce had recommended a minimum of six months’ experience and investments of at least Tk 1 million to qualify for margin loans.

KEY RESTRICTIONS

• Investors without regular income -- such as homemakers, students, and retired persons -- will not be eligible for margin loans.

• Margin funds cannot be invested in companies whose production has ceased, or those categorised as “B”, “Z”, or “G”.

• Margin loans are not permitted for shares of companies listed on only one of the two stock exchanges.

• Investment using margin funds is prohibited in firms listed on SME, ATB, and OTC boards.

• Margin financing cannot be used for purchasing shares through initial public offerings (IPOs).

• Using margin funds to acquire significant shares of a listed company or to purchase shares of a company where the borrower serves as a director is forbidden.

• Company directors are not allowed to use margin loans to invest in their own firms’ shares.

• Shares that are locked, blocked, pledged, or held by directors cannot be used as collateral for margin loans.