The Bangladesh Securities and Exchange Commission imposed a fine of Tk聽1 lakh on Snigdha Equities for violating three rules related to margin trading.
This action stems from findings during an investigation conducted by the BSEC in October 2023, BSEC sources said.
Snigdha Equities breached securities regulations by extending margin loans to a total of nine individuals. Among these individuals were the company鈥檚 chief executive officer, mother of one of the authorised representatives, and seven other clients.
The total amount of these loans was Tk聽49,31,024.46.
The BSEC said that one of the most significant breaches involved the provision of a margin loan of Tk聽45,26,619.26 to Arafat Jahan Biplob, CEO of Snigdha Equities.
This action directly contravenes a directive issued by the BSEC, which explicitly prohibits brokerage houses from offering margin facilities to any of their board members, officers, staff, or management, as well as their immediate family members, including parents, spouses, children, and siblings.
The investigation further uncovered that Snigdha Equities provided a margin loan to Hosne Ara Begum, who is mother of Sarwar Morshad, an authorised representative of the brokerage.
This loan also violated the same regulations that restrict financial dealings with close relatives of employees within the brokerage firm.
Snigdha Equities was also found to have provided margin loans to seven other clients without formal agreements.
According to securities laws, extending margin/credit facilities without margin agreement is strictly prohibited.
The BSEC has instructed Snigdha Equities to pay the Tk聽1,00,000 fine within 30 working days.