The Bangladesh Securities and Exchange Commission (BSEC) has extended the deadline for maintaining provisions on unrealized losses or negative equity produced as margins to December 31 of this year due to the capital market’s ongoing fall.

However, because so many market intermediary institutions have failed, the regulatory body BSEC has extended the deadline until September 30. This is in spite of the directive to prepare a specific and acceptable action plan for preserving provisions and submit it to the commission by June 30 with the board of directors’ approval.

The decision was made during the 965th commission meeting that took place on Tuesday, July 29. This information was released in a press statement signed by BSEC Director and Spokesperson Abul Kalam on Wednesday, July 30.

The notification indicated that following the request from the DSE Brokers Association of Bangladesh (DBA) during the 953rd Commission meeting, it was resolved to prolong the deadline for stock brokers, merchant bankers, and portfolio managers to set aside provisions for unrealized losses or negative equity in customer margin accounts until December 31 of this year. However, to benefit from this provision, all stock brokers, merchant bankers, and portfolio managers with negative equity or unrealized losses were required to develop a specific and acceptable action plan for maintaining provisions on negative equity or unrealized losses and submit it to the Commission by June 30, with the approval of their Board of Directors. Unfortunately, many did not comply. Consequently, during the 965th Commission meeting, it was decided to further extend the deadline for submitting the action plan until September 30 of this year, in response to the DBA’s request.

The announcement also said that market intermediary institutions that had previously submitted work plans without the board of directors’ permission would need to do so again by September 30 with board approval.