Dhaka:The Bangladesh Securities and Exchange Commission (BSEC) has extended the deadline for listed stock brokers and merchant banks to adjust their negative equity and unrealised losses until 2030. This extension includes a requirement for a mandatory 25 percent annual provision starting in 2027.
According to United News of Bangladesh, the decision was made during the commission's 1038th meeting held at its Agargaon office, chaired by Chairman Masud Khan. The new regulation mandates that firms with negative equity as of September 30, 2026, must provision at least 25 percent of that amount annually from 2027, ensuring full clearance by 2030. Institutions already granted extensions will maintain their existing deadlines, while any new negative equity generated within 2026 must be addressed in the same year.
Additionally, the BSEC has set conditions to safeguard investors and ensure the continued operation of affected accounts. Firms are permitted to rebalance portfolios by selling existing shares in negative equity BO accounts and purchasing "A" category shares. However, no new margin loans may be issued for these purchases, and block market transactions in these accounts are prohibited. No interest or portfolio management fees may be charged on these accounts during the provisioning and adjustment period.
Investors are protected from liability and financial burdens related to negative equity accounts, and brokers, stock dealers, and merchant banks are restricted from declaring or distributing cash dividends during the extended period. The BSEC stated that these measures aim to allow brokers and merchant banks to gradually adjust their financial standings, thereby protecting investors' interests, maintaining market discipline, and enhancing market stability and investor confidence.