Bangladesh Securities and Exchange Commission imposes conditions on intermediaries receiving extra time to provision negative equity and unrealized losses

The Bangladesh Securities and Exchange Commission has issued an order setting mandatory requirements for stock brokers, stock dealers and merchant bankers that are granted extended time to maintain provisions and complete adjustments for negative equity and unrealized losses. During the extended period, affected firms must disclose negative equity and unrealized losses in their financial statements in line with International Financial Reporting Standards and submit quarterly updates to the Commission on provisioning and adjustment actions, including relevant board decisions, until the matter is fully resolved. A temporary relaxation of net-worth compliance applies only to deficits arising solely from such provisioning and adjustment. Restrictions also apply to negative equity-related beneficial owner accounts, including a ban on new securities purchases, permission to sell securities at fair market value only for adjustment purposes, and a prohibition on charging margin loan interest or portfolio management fees on those accounts. Firms may not declare or distribute cash dividends, must not create new negative equity, and must fully provision any negative equity that arises accidentally within the current financial year; any Commission-requested information must be provided within seven working days, and the Commission reserves the right to impose additional conditions or amend or withdraw the order in whole or in part.