UNREALISED STOCK LOSSES
M-banks, brokers to get another year to keep provisionStaff Correspondent
Bangladesh Securities and Exchange Commission is likely to allow merchant banks and brokerage houses another year to keep 100 per cent provision against their unrealised losses from the capital market in 2012.
‘The commission may allow merchant banks and brokerage houses another year to keep provision as almost all the organisations have failed to comply with the BSEC order due to the present market condition,’ a BSEC senior officer told New Age.
He also said, ‘The decision will be finalised in a commission meeting to be hold on Tuesday (today).’
On November 10, the Bangladesh Merchant Bankers’ Association appealed to the BSEC for granting them another three years to keep 100 per cent provision against their unrealised losses.
The association of merchant banks made the move as most of the banks had not complied with the BSEC’s directive on keeping provision against unrealised losses in the capital market.
The BSEC in January this year, following an appeal from the BMBA, had allowed the merchant banks and brokerage houses to keep 100 per cent provision in five instalments within December this year.
The regulator set December 31 the deadline to keep 100 per cent provision against their losses in own portfolio and losses against margin loans issued to their clients in 2012.
In December 2012, Bangladesh Bank allowed some banks to keep 100 per cent provision in five instalments — each of 20 per cent — for unrealised losses against their own portfolio investments in the capital market.
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