Published : 19 Aug 2026, 01:52 AM
Updated : 08 Sep 2026, 09:34 AM
Investors can now access margin loans against shares with a minimum investment of Tk 300,000, down from Tk 500,000 under the previous rules.
The Bangladesh Securities and Exchange Commission (SEC) issued the revised Margin (Loan) Rules on Monday night, introducing several changes to margin financing.
Brokerage houses and merchant banks provide the loans to investors to buy shares or other securities.
Under the new rules, financing institutions can lend up to four times their net assets, up from three times previously.
Margin financing will be available only for “A” and “B” category shares.
Shares in the “G”, “N” and “Z” categories, as well as companies listed on the Small and Medium Enterprise (SME), Alternative Trading Board (ATB) and Over-the-Counter (OTC) markets, will remain ineligible.
Shares with a price-to-earnings (PE) ratio above 40, up from the previous threshold of 30, or negative earnings per share (EPS) will also be excluded.
For life insurers, the price-to-book (PB) ratio will apply instead.
Shares with a PB ratio above three or negative net asset value will not qualify.
Borrowers must maintain at least 50 percent equity after taking a margin loan. If equity falls below that level, they must restore it within three days or become ineligible for further financing.
Financing institutions may sell enough shares to bring the account back into balance if the borrower fails to meet the requirement. If equity falls below 25 percent of the loan, shares may be sold without prior notice.
The financing ratio will remain capped at 1:1, meaning an investor with Tk 100 in equity can receive a maximum Tk 100 in margin financing.
The revised rules also require financing institutions to form risk management committees with at least two members and hold at least four meetings a year.
Margin financing agreements will run for one year and renew automatically unless either party gives at least 15 days’ written notice of termination.
The rules also allow Shariah-based margin financing, subject to oversight by a Shariah supervisory board or advisor.
