B Mirror Report: The Bangladesh Securities and Exchange Commission (BSEC) has taken a stricter stance on negative equity in the stock market by rejecting time-extension applications from three brokerage houses and directing them to quickly set aside provisions against losses.

According to sources, the regulator has also asked two other brokerage firms to resubmit revised action plans addressing their financial shortfalls.

The companies whose applications were rejected are AAA Finance and Investment Limited, B and B SS Trade International Limited, and Elegant Stock and Securities Limited. Meanwhile, IFIC Investment Limited and NLI Securities Limited have been instructed to submit revised plans.

In its letter, BSEC said that previously submitted proposals for provisioning against negative equity and unrealized losses must be reassessed and resubmitted with necessary corrections. The regulator also directed the firms to provide detailed information on interest-inclusive negative equity calculations.

The commission rejected the extension requests after reviewing the board-approved recovery plans, which were found unsatisfactory. It has also instructed the relevant authorities to take further action against the affected brokerage houses.

Meanwhile, the Dhaka Stock Exchange Brokers Association of Bangladesh (DBA) has proposed tax relief measures for investors affected by negative equity. It has urged the National Board of Revenue (NBR) to consider exemptions on interest waivers, cash dividends, and capital gains taxes, as well as to remove the existing cap of Tk 10 lakh. According to DBA, such measures would help restore investor confidence and encourage participation in the market.

At the same time, BSEC said that 21 brokerage houses failed to submit monthly reports on negative equity within the stipulated time, in violation of its directive issued on May 14, 2025. The Dhaka Stock Exchange has been instructed to explain the lapses and identify accountability measures.

Data shows that negative equity arising from unpaid losses against margin loans remains a major challenge for the capital market. As of October 31, 2024, the total stood at Tk 7,824.18 crore, which declined to Tk 7,351.86 crore by December 31, 2025.

Market analysts say that information on negative equity and unrealized losses is crucial for assessing the financial health of brokerage firms. Delays or failures in disclosure can increase investor risk and undermine market stability.

Earlier, the commission had granted time extensions to several brokerage houses in phases under conditional arrangements. However, recent actions indicate a stronger push by the regulator to enforce financial discipline and ensure accountability in the capital market.