Bangladesh Securities and Exchange Commission (Risk Based Capital Adequacy) Rules, 2019

†iwR÷vW© bs wW G-1 evsjv‡`k †M‡RU AwZwi³ msL¨v KZ…©cÿ KZ…©K cÖKvwkZ eyaevi, †g 29, 2019 [†emiKvwi e¨w³ Ges K‡c©v‡ikb KZ©„K A‡_©i wewbg‡q RvixK…Z weÁvcb I †bvwUkmg~n ] Bangladesh Securities and Exchange Commission Securities Commission Bhaban E-6/C, Agargaon Sher-e-Bangla Nagar Administrative Area Dhaka-1207, Bangladesh NOTIFICATION Dated : 22 May 2019 No. BSEC/CMRRCD/2017-357/221/Admin/89In exercise of the power conferred by section 24(1) of the Bangladesh Securities and Exchange Commission Act, 1993 (Act No. 15 of 1993), to introduce capital adequacy requirements for all market intermediaries, the Bangladesh Securities and Exchange Commission makes, after prior circulation, the following rules, namely:-

1. Short title and applicability.(1) These rules may be called the
   Bangladesh Securities and Exchange Commission (Risk Based Capital Adequacy) Rules, 2019. (2) These rules shall be applicable for the registered entities as defined under clause (y) of sub-rule (1) of rule 2, and any other capital market intermediaries registered or to be registered with the Commission except registered mutual fund and collective investment scheme including alternative investment fund. ( 16513 ) g~j¨ : UvKv 4000

16514 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 (3) The provisions of these rules along with the existing provisions under different rules regarding the capital adequacy of the registered entities shall be complied with, in parallel, until or unless the Commission gives direction about the end of parallel run by an order in writing. (4) With the effective of the provision of these rules, provisions related to capital adequacy or risk based capital adequacy, whatever term used, in different rules issued under section 24 of the Bangladesh Securities and Exchange Commission Act, 1993(Act No. 15 of 1993) and
section 33 of the Securities and Exchange Ordinance, 1969 (Ordinance
No. XVII of 1969) for the registered entities shall be guided by these rules until, or unless the Commission give any explanation, or clarification by order in writing.
2. Definitions.(1) In these rules, unless there is anything
repugnant in the subject or context  (a) “Act” means the Bangladesh Securities and Exchange Commission Act, 1993(Act No. 15 of 1993); (b) “capital adequacy” means the level of total capital against the total risk exposure of a registered entity that is required to be maintained as per these rules to ensure continuation of a safe and efficient operation and to withstand against any seen and unforeseen losses; (c) “capital adequacy ratio (CAR)” means the standard ratio prescribed in these rules for measuring the level of capital adequacy of a registered entity; (d) “counterparty” means any person who is enjoying margin financing from any registered entity; (e) “counterparty exposure” means the outstanding balance of the margin account holder arises due to availing margin financing facility from any registered entity;

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16515 (f) “counterparty risk requirement (CPRR)” means exposure to financial loss due to risk of default or non-recovery of any receivable or any other overdue amount due from any counterparty; (g) “collateral”, in relation to a registered entity, means the following securities or assets, which have been considered as eligible to be kept as collateral (i) any listed shares; (ii) any specified securities as declared by central counterparty (CCP); (iii) any qualifying debt securities; (iv) any special debt securities, which is (1) deposited as security by the registered entity with another person; or (2) deposited as security with the registered entity by another person, and are un-encumbered in its possession and readily realizable by it; or (3) encumbered only by virtue of being lent, deposited or pledged by the registered entity with a central counter party, or any of its clearing participants, to secure its obligation to meet its clearing obligations or liabilities; (v) any others assets, as determined by the Commission or exchange or the CCP; (h) “Entry Capital Requirement (ECR)” means the minimum capital requirement along with the minimum net worth requirement laid down in the respective rules under which a registered entity shall apply for its registration; (i) "haircut" means the percentage used on any component of assets, or liabilities to determine the deductible amount in computing the liquid capital, and the total capital requirement;

16516 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 (j) “haircut amount” means (i) an amount derived by multiplying the value of the assets with the haircut percentage specified at Part A of
Schedule-A, in determining the liquid asset in connection
with the computation of liquid capital balance (LCB) of a registered entity; (ii) an amount derived by multiplying the value of the components of the supplementary capital with the haircut percentage specified at Part A of Schedule-C in connection with the computation of the Total Capital (TC); (k) “large exposure risk requirement (LERR)” means exposure to financial loss due to default of any concentrated position in any counterparty and liquidity risk of any securities; (l) “liability risk requirement (LRR)” means exposure to financial loss caused by non-performance, or negligence in the legitimate role, and contractual obligations with its clients, stakeholders, counterparty, unit holders and related parties of the trust fund, or any other person who has right to claim against the registered entities; (m) “liquid assets” means the aggregate amount of the components of the current assets, which is realizable within (30) thirty days of claim, are required to be counted in the liquid assets of a registered entity under these rules:
Provided that property, plant and equipment, related party amounts due to the entity, deferred expenditure, intangible assets and such other long term assets shall not be considered as liquid assets; (n) “liquid capital” means the amount constituted as liquid assets (adjusted by applicable haircut) less net short term obligations (adjusted by applicable deductions); (o) “liquid capital deficit”, means the shortfall in liquid capital maintained from minimum liquid capital requirement; (p) “listed” in relation to securities, means listed with or traded on any exchange;

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16517 (q) "margin account holder" means (i) any client to whom the registered entity provides credit financing under the Margin Rules, 1999; or (ii) any client who maintains margin account with the registered entity under the wmwKDwiwUR I G·‡PÄ Kwgkb (gv‡P©›U e¨vsKvi I †cvU©‡dvwjI g¨v‡bRvi) wewagvjv, 1996; (r) "margin financing" or “credit facilities” means the process of financing arrangements by a registered entity to its client to facilitate the acquisition or holding of marginable securities; (s) "marking to market" means the method or the procedure of adjusting the value of open position on any securities on the basis of market price; (t) “operational risk” means the risk of loss resulting from inadequate or failed internal processes, people management and systems, or from any other internal or external events those exposed from inadequate management of operational risk, clearing and settlement failure, shortage of liquid resources, non-flexibility of funding sources, or such type of other risk issues; (u) “operational risk requirement (ORR)” means exposure to financial loss that may incur due to expected and unexpected events arising from operational risk and other general risk factors like market risk, interest rate risk, currency risk, liquidity risk, economic risk, country risk, legal risk, inflation risk, stakeholder risk, settlement risk, etc.; (v) “Ordinance” means the Securities and Exchange Ordinance, 1969 (Ordinance No. XVII of 1969); (w) “position risk requirement (PRR)” means exposure to financial loss due to adverse effect in the value of investment positions; (x) "qualifying debt securities" means a bond, debenture, notes or any other securities or instruments acknowledging, evidencing or creating indebtedness shall be eligible in consideration of these rules;

16518 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 (y) “registered entity” means an entity registered with the Commission under section 10 of the Act for which a regulatory capital requirement is prescribed under rule 6; (z) “regulatory capital” means the minimum amount of total capital requirement that the intermediaries are required to maintain on continuous basis; (aa) "repurchase transaction" means a transaction where there is a sale of securities and a further arrangement obliging the seller of the securities to repurchase from the purchaser, or obliging the purchaser to resell to the seller, securities of the same description as the securities first sold, at a pre-determined consideration and date; (bb) "regulatory liquid capital”, in relation to a registered entity, means the percentage of the total liabilities specified in these rules, or liquid capita, whichever is higher, to be maintained as liquid capital balance on continuous basis; (ce) "segregated account" means any specified account for holding client’s money which is separate from the accounts of a registered entity; (dd) “specific provision” means the percentage of provision set by the Commission from time to time to be maintained against the overdue outstanding margin financing to any margin client or any other client; (ee) “strategic holding” means long term investment in any securities declared by a registered entity which the entity shall hold at least for (05) five years and shall not sell or transfer any amount of such holding without the permission of the Commission and proper disclosure; (ff) "subordinated debt", means any debt instrument, having maturity equal or above seven (07) years issued by the registered entity, and the claim of the instrument holder is subordinated to the claims of all other present and future creditors of that entity; (gg) “total capital” means the sum of core capital and supplementary capital;

evsjv‡k †M‡RU, AwZwi³, †g 29, 2019 16519 (hh) "underwriting risk requirement (URR)" means exposure to financial loss due to execution of underwriting commitment and subsequent risk arises from position risk on the underwritten securities; (ii) "unrealized losses" means accrued loss in any instrument not accounted for at any given point of time; (jj) "unrealized profits" means un-actualized profits calculated by marking to market an open position in- (a) any securities, (b) a derivative contract, (c) a foreign exchange agreement, or (d) an interest rate swap agreement; and (kk) “wholesale trading” means any such trading where the stock-broker is participating in the trade execution for merchant banker and portfolio manager as designated broker, for mutual funds or Collective Investment Scheme, or for foreign clients, through any custodian, or securities custodian. (2) Unless otherwise repugnant for any purpose, words and expressions used herein and not defined, but defined in the Trust Act, 1882 (Act No. II of 1882), the Registration Act, 1908 (Act No. XVI of 1908), the Securities and Exchange Ordinance, 1969 (Ordinance No. XVII of 1969), e¨vsK-†Kv¤úvbx AvBb, 1991 (1991 m‡bi 14 bs AvBb), evsjv‡k wmwKDwiwUR A¨vÛ G·‡PÄ Kwgkb AvBb, 1993 (1993 m‡bi 15 bs AvBb), Avw_©K cÖwZôvb AvBb, 1993 (1993 m‡bi 27 bs AvBb), ‡Kv¤úvbx AvBb, 1994 (1994 m‡bi 18 bs AvBb), wWcwRUwi AvBb, 1999 (1999 m‡bi 6 bs AvBb), exgv AvBb, 2010 (2010 m‡bi 13 bs AvBb) G·‡P‡Äm wWwgDPz¨qvjvB‡Rkb AvBb, 2013 (2013 m‡bi 15 bs AvBb), dvBbvwÝqvj wi‡cvwUs AvBb, 2015 (2015 m‡bi 16 b¤^i AvBb), shall have the same meanings respectively assigned to them in the said Acts and Ordinances, and Rules and Regulations made thereunder.
3. Financial reporting and disclosures.A registered entity shall,
for the purposes of these rules, (a) account for all assets and liabilities as per the requirements of International Financial Reporting Standards (IFRS), unless or otherwise specified in these rules, or any other relevant rules related to the operation of the registered entity;

16520 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 (b) prepare financial statements with minimum disclosures in accordance with the components described in “Uniform components of financial reporting and disclosures” as per
Schedule-B, or as decided by the Commission from time to
time, as applicable for the registered entity considering its operation nature.
4. Financial resources requirements under capital adequacy
framework.(1) Capital adequacy framework: A registered entity shall, at all times, maintain the minimum financial resources required under the following conditions:
(a) Entry Capital (EC) requirement shall be initial paid-up capital requirement as per the eligibility conditions of registration of the respective registered entity in the relevant rules for registration; (b) Total Capital (TC) requirement shall be maintained on continuous basis within three years from the effective date of these rules:
Provided that the registered entity shall calculate and submit report of the total capital requirement as per Part A of
Schedule-C and also following the conditions prescribed at
Part B of Schedule-C after one year from the effective date of
these rules;
(c) Capital Adequacy (CA) requirement shall be maintained on continuous basis by all registered entities against its level of risk exposures within three years from the effective date of these rules:
Provided that the registered entity shall calculate and submit report of the capital adequacy as specified in sub-rule (3) after one year from the effective of these rules ; (d) Liquid Capital (LC) requirement of any registered entity shall be maintained on continuous basis as specified in rule 8 of these rules within (02) two years from the effective date of these rules:
Provided that the registered entity shall calculate and submit report of the liquid capital balance as per Part A of Schedule￾A and also following the principles outlined at Part B of
Schedule–A after one year from the effective date of these
rules:

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16521 (2) Computation of capital adequacy ratio (CAR): Each registered entity shall follow the following formula in computing the capital adequacy:
Total Capital (TC)
Capital Adequacy Ratio (CAR)= ------------------------------------X 100; Total Risk Requirement (TRR) Where, (a) Total Capital = Core Capital + Supplementary Capital ; and (b) Total Risk Requirement (TRR) = Operation Risk Requirement (ORR) + Position Risk Requirement (PRR) + Counterparty Risk Requirement (CRR) + Underwriting Risk Requirement (URR) + Large Exposure Risk Requirement (LERR)+ Liability Risk Requirement (LRR). (3) Each registered entity shall fulfil the following requirements for capital adequacy purposes: (a) Capital adequacy ratio shall be maintained minimum 120%, i.e. its Total Capital requirement shall be, at all times, minimum 1.20 times of its Total Risk Requirement; (b) Its Core Capital shall be, at all times, greater than its Operational Risk Requirement; (4) The components of the Total Risk Requirement (TRR) of the respective registered entity shall be computed as per the framework outlined in Part B of Schedule – D and as per the prescribed form in Part A of Schedule –D, as applicable to the registered entity.
5. Components of total capital.(1) A registered entity shall
maintain the total capital considering the components of capital under the following Regulatory Capital Requirement (RCR) framework:
(a) Core Capital: The components of core capital as follows:
(i) Share capital (i.e. Paid-up capital + Share Premium, if any); (ii) General Reserve; (iii) Retained Earnings; (iv) Capital Reserve;

16522 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 (b) Supplementary Capital: The components of supplementary capital are as follows:
(i) General Provision;
(ii) Specific Provision;
(ii) Revaluation Surplus or un-realized fair value gain:
(1) for property, plant and equipment (with applicable haircut); (2) for proprietary position in listed securities (with applicable haircut); (3) for proprietary position in non-listed securities (with applicable haircut); (4) for strategic holding (with applicable haircut); (iii) Any preference share (with applicable haircut); (iv) Long-term subordinated debt not below credit rating of “A” in the long term. (2) Conditions in computing total capital: A registered entity shall calculate the total capital as per Part A of Schedule-C and maintaining the conditions at Part B of Schedule-C.
6. Regulatory capital requirements for registered entities.(1) For
stock- broker and stock- dealer:
(a) Each stock-broker and stock-dealer shall maintain the regulatory capital considering its scope of operation mentioned at clause (b) on single or consolidated operation basis; (b) The scope of operations of a stock- broker and stock- dealer shall be as follows:
(i) General Stock Broking: when the stock-broker deals with retail and institutional clients’ account directly;

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16523 (ii) Wholesale trading: when the stock-broker deals with such account where clients are trading through any securities custodian or custodian or as any approved agents (on behalf of underlying clients, or as designated broker); (iii) Margin Financing: when the stock-broker is providing credit facilities to its approved clients for securities transaction and maintains margin accounts; (iv) Depository Participant: when the stock-broker is performing the activities of depository participant; (v) Clearing Participant: when the stock broker is performing the activities of clearing participant; (vi) Stock- Dealer: when the stock -broker is also functioning as a stock- dealer; (vii) Full-functional stock broker: when the stock broker is functioning all the above mentioned roles under sub￾clause (i) to (vi) simultaneously. (c) Each stock- broker and stock- dealer shall maintain the regulatory capital as follows:
Category of operation Regulatory Capital General stock broking Minimum Tk. 50 million as base requirement Wholesale trading Additional Tk. 30 million over the base requirement Margin financing Additional Tk. 50 million over the base requirement Depository Participant and Clearing Participant No additional requirement over the base requirement Stock-Dealer Additional Tk. 20 million over the base requirement; but minimum Tk. 20 million if only Stock- Dealer Full Functional Stock￾Broker and Stock- Dealer Minimum Tk. 150 million

16524 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 (2) For merchant banker and portfolio manager: Each merchant banker and portfolio manager shall maintain the regulatory capital considering its scope of operation as follows:
Area of operation Regulatory Capital Issue Management Minimum Tk. 50 million as base requirement Underwriting Additional Tk. 150 million over the base requirement Portfolio Management (Margin Financing) Additional Tk. 150 million over the base requirement Proprietary Fund management Tk. 50 million over the base requirement Full Functional Merchant Bank Minimum Tk. 350 million (3) For asset manager: Each asset manager shall maintain the regulatory capital considering its scope of operation as follows:
Area of operation Regulatory Capital Mutual fund management Base requirement: Minimum Tk. 100 million Institutional Portfolio Management Additional Tk. 20 million over the base requirement Proprietary position as Sponsor of any fund Equivalent amount of full subscription amount being a sponsor of any fund as additional requirement over the base requirement (4) For fund manager: Each fund manager shall maintain the regulatory capital considering its scope of operation as follows:
Area of Operation Regulatory Capital Alternative investment fund management Base requirement: Minimum Tk. 50 million or Tk. 20 million over the initial paid-up capital requirement, whichever is higher. Proprietary position as sponsor and Fund Manager Equivalent amount of full subscription amount as a sponsor and fund manager, as additional requirement over the base requirement.

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16525 (5) For credit rating company: Each credit rating company shall maintain the regulatory capital as Tk. 50 million. (6) For trustee, securities custodian and custodian: Each trustee, securities custodian and custodian shall maintain the regulatory capital as 150% of the entry paid-up capital requirement. (7) For any other registered entities: The Commission may maintain the regulatory capital requirement for any other registered entities from time to time by an order in writing. (8) Each registered entity shall report to the Commission, exchange, if applicable, and also disclose its operational scope in its financial statements and in its own website covering any or all of the areas of operation within one year of effective of these rules.
7. Framework of total risk requirement (TRR).The
computation framework of the risk requirements against each components of TRR shall be as per Part B of Schedule-D.
8. Maintenance of liquid capital (LC).(1) A registered entity
shall maintain on continuous basis a liquid capital balance as regulatory liquid capital under the capital adequacy framework, in the following:
Category of Operation Liquid Capital Balance Stock-Broker and Stock-Dealer 8% of Total Liabilities or liquid capital, whichever is higher Merchant Banker and Portfolio Manager Asset Manager Fund Manager Credit Rating Company (2) Each registered entity mentioned in sub-rule (1) shall attain the highest level of regulatory liquid capital specified at the table at sub-rule (1) in three phases; where minimum threshold of liquid capital balance shall be determined considering at 4%, and thereafter at 6% of total liabilities, respectively in the first, and second phase and the highest level in third phase; (3) The first phase in sub-rule (2) shall be started after two years of effective of these rules:
Provided that each phase shall continue for one year of effective date of the provision in sub-rule (2).

16526 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 (4) A registered entity, if avails registration for more than one category of operation from the Commission, then it shall maintain the higher requirement of the regulatory liquid capital requirement specified in sub-rule (1); (5) The computation of the liquid capital balance shall be in the prescribed form as per Part A of Schedule-A and also as per the principles outlined for liquid assets at Part B of Schedule-A; (6) The Commission may determine the haircut or deduction rate on any types of assets or liabilities by order in writing for sub-rule (5).
9. Reporting and Compliance.(1) A registered entity shall, at the
end of each quarter, and not later than fifteen days after the end of quarter, as applicable, submit to the Commission, quarterly reports in the manner specified under sub-rule (3), and in a form specified by the Commission and signed in the manner specified under sub-rule (4). (2) A report made under sub-rule (1) shall include (a) a comparative statement of comprehensive income, as at the end of each quarter; (b) a summary of bank loans, advances, credit facilities and other financial arrangement availed by the registered entity, as at the end of each quarter; (c) a statement of total capital in a form prescribed at
Part A of Schedule – C, as at the end of each quarter;
(d) a report on computation of capital adequacy ratio as per sub￾rule (2) of rule 4, as at the end of the each quarter; (e) a statement on liquid capital computation as per sub-rule (4) of rule 8, as at the end of the each quarter. (3) For the purposes of these rules, a registered entity shall submit all the reports referred to in the sub-rule (2) to the Commission and exchange, if applicable, electronically by means of an online communication system approved by the Commission:
Provided that the Commission may seek any of the aforementioned reports in paper form.

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16527 (4) A report made under sub-rule (2) shall be signed by the chief executive officer of the registered entity, or by an officer duly authorized by the Board to carry out such mandate. (5) The Commission shall, for the purposes of reporting under these rules, approve framework for an online communication system for the submission of the reports:
Provided that exchange shall submit the online communication framework to the Commission for the stock-broker or stock- dealer within (06) six months of effective of these rules; (6) Each registered entity shall calculate the capital adequacy report on quarterly basis and preserve those reports internally up to the completion of statutory audit. (7) The end of the quarter date shall be the cut-off date for preparation of the capital adequacy related reports. (8) The computation of the year end capital adequacy shall be a part of the financial statements and the statutory auditor shall also provide a separate report about the accuracy of the computation in the financial statements. (9) The Commission or the exchange, as applicable, shall time to time implement an early warning system, by order in writing, to ensure the appropriate capital adequacy level if it falls below 120% of the total risk requirement:
Provided that the Commission shall impose any type of operational restriction or condition under the early warning system to maintain the appropriate capital adequacy level anytime.

16528 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 (10) No registered entity shall declare and distribute cash dividend if any of the components of the capital adequacy framework falls below the minimum level specified in these rules.
10. Registered entities to provide information.The Commission
may at any time, by notice in writing, require a registered entity to provide within the time and in a manner specified in the notice, such information, including any document relating to its financial resources or any other matter.
11. Clarification, Instructions and Order.(1) The Commission
may provide clarifications of any provision of these rules in case of arising any confusion. (2) The Commission may issue instructions and guidelines on operational aspects or may issue order, if necessary, under these rules. (3) The Commission may impose any further restrictions or conditions to any registered entity on any reasonable ground by order in writing.

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16529
Schedule-A
Part A
[see rule 2(1)(i);rule 4(1)(d);rule 8(5)] Statement of Liquid Capital balance Name of the Intermediary : As on the date :
Area of Operation:
Item Assets Note ref.
Amount as in
Balance sheet
Proposed
Haircut in %
Amount after
Haircut
1 Cash and Bank
Balances

• -
  Cash in Hand 0.0 -
  Cash at Bank in
  Company's operational account
  0.0 -
  Cash at Bank in trading accounts (Stock Dealer A/C)
  0.0 -
  Cash at Bank accounts for clients (consolidated customer account)
  0.0 -
  Cash at Bank at IPO
  Account
  100.0 -
  Investments in FDR 0.0 -
  Others cash and cash equivalent
  0.0
  2 Net Receivable from
  Exchange, Depository,
  CCP and others

Cash deposits with
Exchanges (as margin/ security) :

Mandatory 100.0
Excess over mandatory
0.0

16530 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 Cash deposits with Clearing House (as margin/security):

Mandatory 100.0
Excess over mandatory 0.0
Cash deposit with depository (as per rule):

Mandatory 100.0
Excess over mandatory 0.0
Assets provided to others as security

• -
  Assets kept as security against any obligations 100.0 Assets kept as security but exercisable within 30 days 0.0 Cash provided as security for short selling 100.0 3 Net Receivable from Securities Trading

Receivable from DSE
(categorized as
A,B,G,N,Z and DVP)

Receivable against A, B,
G & N category
0.0 -
Receivable against z category
5.0 -
Receivable against DVP category
5.0 -

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16531 Receivable from CSE (categorized as A,B, G,N,Z and DVP):

Receivable against A, B,
G & N category
0.0 -
Receivable against z category
5.0 -
Receivable against DVP category
5.0 -
Receivable from
Stock- Broker/Stock -
Dealer
0.0 -
Receivable from
Merchant Banker
0.0 -
Receivable from selling agents
0.0 -
Receivable under securities borrowing and lending agreements
5.0 -
Receivable under repurchase transactions
0.0 -
Receivable from others 0.0 -
4 Net receivable from margin clients -

• -
  Receivable from
  Clients having no margin or full erosion of clients' equity (e.g.no equity against debit balance)
  20.0 -
  Receivable from Clients fall under force sale condition (e.g. equity is between 100% and 125% of DB)
  15.0 -

16532 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 Receivable from Clients fall under margin call (e.g. equity is >125% of DB but <150% of DB)
5.0 -
Receivable from regular Margin Clients (e.g. equity is >150% of debit balance)
0.0 -
5 Net Receivable from other Clients-

• -
  Receivable after securities trading
  15.0 -
  Receivable arises from fee, commission & charges
  5.0 -
  6 Net receivable from counterparties (clients, designated clients, etc.)
  0.0 -
  7 Net Receivable arises from short selling
  10.0 -
  8 Proprietary positions in securities and specified investments:

i. Proprietary positions
in Equity securities

• -
  Value of "A" category instruments
  10.0 -
  Value of
  "B/G/N/..." category instruments
  12.0 -
  Value of "Z" category instruments
  15.0 -
  Value of
  "OTC" category instruments
  20.0 -

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16533 Value of Non-Listed Instruments
25.0 -
ii. Proprietary positions
in MFs & CISs including AIFs

• -
  Value of listed funds
  10.0 -
  Value of non-listed funds
  3.0 -
  Value of AIFs 25.0 - iii.Proprietary positions in Debt Instruments & ABSs

Value of listed debt instruments & ABSs
5.0 -
Value of no-listed debt instruments
10.0 -
Value of non￾listed ABSs
10.0 -
iv. Proprietary Position
in strategic investments

• -
  Value of listed strategic investments
  10.0 -
  Value of no-listed strategic investments
  25.0 -
  v. Proprietary
  Position in money market Instruments

Value of
Govt. & BB instruments
0.0 -
Value of commercial paper
10.0 -

16534 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019
vi. Own subscription
in IPOs but not yet allotted
10.0 -
vii. Other Investment n/a
9 Proprietary position in Derivatives n/a - 10 Other assets arising from:

• -
  Receivable against
  Advisory Fees,
  Commission, etc.
  10.0 -
  Dividend Receivable 0.0 -
  Interest Receivable 0.0 -
  Prepaid expenses 100.0 -
  Security deposits 100.0 -
  Any other (need to specify)
  11 Total liquid assets (aggregate of items 1 to 10)

Liabilities:
12 Short positions in securities held for own account
0.0 -
13 Payable to Clients 0.0 -
14 Short Term Business
Liabilities:

• -
  Payable to Banks, if not for trading & investment (current portion of long-term liabilities )
  0.0 -
  Payable to FIs, if not for trading & Investment (current portion of long -term liabilities)
  0.0 -

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16535 Payable to Banks & FIs for loan against Margin Financing & Investment (full amount)
0.0 -
Payment obligation against sub-debt, preference shares (current portion)
0.0 -
Payable to associate companies or persons
0.0 -
15 Amounts payable to clearing houses/ Exchanges/ Depository etc.

• -
  Payable to Exchanges 0.0 -
  Payable to Clearing
  House/ CCP
  0.0 -
  Payable to Depository 0.0 -
  Payable to Brokers 0.0 -
  16 Other Liabilities and
  Provisions:

Accruals & Accounts payable
0.0 -
Deferred tax and other differed liabilities
50.0 -
Provision for Margin
Loan
100.0 -
Provision for Gratuity,
PF & others
50.0 -
Provision for Tax &
VAT
0.0 -
Interest Suspense against Margin Loan
100.0 -
Liabilities for Expenses 0.0 -
Interest Payable 0.0 -

16536 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 Provision for contingent liabilities and floating losses
50.0 -
Others (clearly specified in notes)
0.0 -
17 Net Short term obligations after haircut Aggregate of item 12 to item 16 XXXXX XXXX 18 Total Liabilities As per Balance Sheet XXXXX XXXX 19 Liquid Capital (Amount in item 11 minus item 17 ) XXXXX 20 Regulatory LCB :
4%/6%/8% of Total
Liabilities ( Item 18)
XXXXX
21 Excess/(Deficit) in
Liquid Capital
Balance
(Amount in
Item 20 less
19)
XXXXX

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16537
Part B
[See rule 8(5)]
Components and computation principles of liquid assets (1) Exclusions from liquid assets: A registered entity shall not include in its liquid assets (i) any of its assets which is under control of exchange, CCP or any other part; or (ii) any of its assets whose proceeds are not freely remittable to Bangladesh or realizable within five working days of execution; (iii) any assets under its ownership, provided to any person as security or collateral against any liabilities or obligations, which is not realizable within thirty days of application; (iv) any cash or cash equivalent assets of the clients is under control of the registered entity; (v) any of its fixed assets or tangible assets or any other long term assets including intangible assets. (2) Inclusion in Liquid Assets: A registered entity shall calculate the liquid assets as prescribed in the Statement of Liquid Capital Balance as per this Schedule and the conditions as follows:
(a) Assets of registered entity provided to others as security or collateral:
any assets under its ownership, provided to any person as security or collateral against any liabilities, obligations or any facilities which is realizable within thirty days of application. (b) Cash in hand and cash at bank: A registered entity shall include in its liquid assets:
(i) cash in hand which the registered entity beneficially owns; (ii) money which the registered entity beneficially owns and holds in its name to any bank and FIs, which is realizable within thirty days of notice;

16538 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 (c) Amounts receivable from clients in respect of securities trading: A registered entity shall include in its liquid assets the following amount as receivable from any of its clients arising from purchase by the client of securities on a cash￾against-delivery basis: (i) any such amount receivable which is not yet due for settlement according to the settlement date; or (ii) any such amount receivable has been outstanding for more than three business day after the settlement date, the amount which is the lower of (a) such outstanding amount receivable less any specific provision for bad or doubtful debts made in respect of such outstanding amount; and (b) seventy percent of such outstanding amount. (d) Amounts receivable in respect of providing securities margin financing:
(a) A registered entity shall include in its liquid assets any net amount receivable from any of the margin clients of a registered entity, calculated as the amount by which the amount receivable from the margin client exceeds the amount payable by the registered entity to the margin client arising from the provision made by the registered entity, after deducting the higher of (i) any specific provision for bad or doubtful debts made in respect of such net amount receivable; and (ii) the margin shortfall amount, calculated as the amount by which the net amount receivable exceeds the aggregate of (a) the market value of collateral, other than illiquid collateral, provided by the client, less the applicable haircut amount in relation to such collateral; (b) the amount of cash deposited as security by the client; and

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16539 (c) the maximum amount that the registered entity can draw under a bank guarantee provided to the registered entity by the client and issued by an authorized financial institution or an approved bank incorporated outside Bangladesh. (e) Cash provided as security for short selling: A registered entity shall include in its liquid assets an amount receivable in the amount of any cash (including interest accrued on it) provided by the registered entity as a security to the counterparty in respect of a short selling of securities by the registered entity where the registered entity has not yet delivered securities to the counterparty for settlement, where the counterparty is (a) a dealer; (b) a central counterparty; or (c) a clearing participant. (f) Proprietary positions of registered entities:
(1) A registered entity shall include in its liquid assets any of the following assets which it beneficially owns (a) position in equity securities; (b) position in mutual funds and collective investment schemes (CISs); (c) position in debt instruments and asset backed securities (ABSs); and (d) position in strategic investments (e) position in money market instruments; at marking to market value or fair value, whichever is applicable, less the haircut amounts in relation to the securities or specified investments concerned as per Schedule - A.

16540 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 (2) A registered entity shall include in its liquid assets any derivative contract which the registered entity beneficially owns (a) listed shares; (b) qualifying debt securities; (c) special debt securities; (d) specified securities; and (e) specified investments by the Commission, at market value, less twice the haircut amounts in relation to the securities or specified investments concerned; (g) Amounts receivable from central counter party, etc.: A registered entity shall include in its liquid assets (a) amount receivable from a registered central counterparty; and (b) cash deposited with such central counter party, other than (i) admission fees which the registered entity has paid to such central counter party; (ii) contributions which the registered entity has made to the Investor Protection Fund and Settlement Guarantee Fund of such central counter party; and (iii) clients money held in a segregated account maintained with such central counter party. (h) Amounts receivable under securities borrowing and lending agreements: A registered entity, which is the borrower of securities under a securities borrowing and lending agreement, shall include in its liquid assets, any amount receivable from the lender of the securities which it is considered to have in respect of any cash provided by the registered entity as a security to the lender.

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16541 (i) Amounts receivable under repurchase transactions: A registered entity which is the purchaser in the first instance of any securities under a repurchase transaction, shall include, in its liquid assets, any amount receivable from the seller of the securities which is considered to have in respect of the consideration for which the registered entity purchased the securities. (j) Miscellaneous assets: A registered entity shall include in its liquid assets any of the following (a) the amount of any fees, commissions, commission rebates and interest charges to which the registered entity is beneficially entitled which arise from the carrying on of any activity for which it is registered and (i) which have accrued and will first be due for billing or payment within the next three months; or (ii) which have been billed or fallen due for payment and remain outstanding for one month or less after the date on which they were billed or fell due; (b) deposits which the registered entity beneficially owns and maintained with, and in accordance with the rules or requirements of a registered securities exchange as security for its obligations or liabilities owed to the registered securities exchange; (c) prepaid operating expenses to be incurred within the next three months; (d) dividends receivable within one month on shares listed on a exchange which are traded on an ex-dividend basis and which the registered entity beneficially owns; (e) interest accrued on qualifying debt securities or special debt securities which are traded on an ex-interest basis and which the registered entity beneficially owns.

16542 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019
Schedule – B
[see rule 3]
Uniform Components of Financial Reporting and Disclosures Name of the Intermediary : As on date :
Area of Operation:
Item Assets Note ref.
Amount as in
Amount as in
Balance sheet
Balance sheet
1 Cash and Bank Balances - -
Cash in Hand
Cash at Bank in Company's account

Cash at Bank in trading accounts (Stock Dealer A/C)

Cash at Bank accounts for clients (consolidated customer account)

Cash at Bank at IPO Account
Investments in FDR
2 Amounts Receivable from
Exchange, Depository and CCP

• -
  Cash deposits with Exchanges
  (as margin) (mandatory/excess)

Mandatory
Excess over mandatory
Cash deposits with Clearing
House (as margin)
(mandatory/excess)

Mandatory
Excess over mandatory
Cash deposit with depository (as per rule) (mandatory/excess)

Mandatory
Excess over mandatory

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16543 3 Amounts Receivable from Securities Trading

• -
  Receivable from DSE (categorize as A, B, G, N, Z and DVP)

Receivable against A, B, G and N category

Receivable against Z category

Receivable against DVP category

Receivable from CSE (categorize as A,B,G,N, Z and DVP):

Receivable against A, B, G
& N category

Receivable against z category

Receivable against DVP category

Receivable from Stock
Broker/Stock Dealer

Receivable from Merchant
Banker

Receivable from selling agents
Receivable from others
4 Amounts receivable from margin clients -

• -
  Receivable to Clients having no margin or full erosion of equity (e.g.no equity against debit balance)

Receivable to Clients fall under force sale condition (e.g. equity is >DB but < 125% of DB)

16544 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 Receivable to Clients fall under margin call (e.g. equity is >125% of DB but <150% of DB)

Receivable to regular Margin
Clients (e.g. equity is >150% of debit balance)

5 Amounts Receivable from other Clients-

• -
  Receivable after securities trading

Receivable arises from fee, commission & charges

6 Amounts receivable from securities dealer (if subsidiary)

• -
  7 Amounts Receivable arises from short sale

8 Proprietary positions in securities and specified investments

• -
  Proprietary positions in Equity securities

Value of "A" category instruments

Value of
"B/C/N/..." category instruments

Value of "Z" category instruments

Value of "OTC" category instruments

Value of Non￾Listed
Instruments

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16545 Proprietary positions in MFs & CISs including AFs

• -
  Value of listed funds

Value of non￾listed funds

Value of AIFs
Proprietary positions in Debt
Instruments & ABSs

• -
  Value of listed debt instruments

Value of no￾listed debt instruments

Value of ABSs
Proprietary Position in strategic investments

• -
  Value of listed strategic investments

Value of no￾listed strategic investments

Proprietary Position in money market Instruments

• -
  Value of Govt.
  & BB instruments

Value of commercial paper

Own subscription in IPOs but not yet allotted

• -
  Other assets
  9 Proprietary position in
  Derivatives

10 Other assets arising from:
Receivable against Advisory
Fees, Commission, etc.

16546 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 Prepaid expenses Security deposits 11 Advance /Investments in Associated undertakings (long term):

• -
  Advance to Subsidiaries
  Advance to Associated
  Companies

Advance to Directors & Staffs
Other Advances
12 Fixed assets (net off
Depreciation & amortization):

• -
  Land & Land Development
  Building & Other structures
  Other tangible assets
  13 Intangible Assets: - -
  Software
  Goodwill, Patents and other
  Intangible Assets

14 Value of investment in
Exchange (against
Membership value)

• -
  15 Other Long Term Assets: - -
  Long Term Investments
  Long Term Prepayments &
  Deposits

Deferred Tax Assets
Others (clearly specified in notes) 16 Total assets (aggregate of amount in items 9 to 15)

• -
  Liabilities:
  17 Short positions in securities held for own account

18 Payable to Clients - -

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16547 19 Short Term Business Liabilities: - - Payable to Banks, if not for trading & investment (current portion of long term liabilities )

Payable to FIs, if not for trading & Investment (current portion of long term liabilities)

Payable to Banks & FIs for loan against Margin Financing & Investment (full amount)

Payment obligation against sub-debt, preference shares (current portion)

Payable to associate companies or persons

20 Amounts payable to clearing houses/Exchanges/Depository, etc.

• -
  Payable to Exchanges
  Payable to Clearing House
  Payable to Depository
  Payable to Brokers
  21 Other Liabilities and Provisions: - - Accruals & Accounts payable Deferred tax and other deferred liabilities

Provision for Margin Loan
Provision for Gratuity, PF & others

Provision for Tax & VAT
Interest Suspense against
Margin Loan

Liabilities for Expenses
Interest Payable

16548 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 Provision for contingent liabilities and floating losses

Others (clearly specified in notes) 22 Any others (need to be specified) 23 Non-current Loan Liabilities - - Long term loan liabilities (other than current portion amount)

Approved subordinated debt
(other than current portion amount)

Approved Redeemable preference shares (other than current portion amount)

24 Shareholders' Equity: - -
Share Capital
Share Premium
General Reserve
Capital Reserve
Dividend Equalization Reserve
Revaluation Reserve
Adjustment for diminution in value of portfolio holdings

Other Reserves
Retained Earnings
25 Total liabilities &
Shareholders' Equity
(aggregate of amounts in item 17 to 24)

• -

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16549
Schedule-C
Part A
[see rule 2(1)(j)(ii); rule 4(1)(b); rule 5(2)] Statement of Total Capital Computation SL. Components B/S Amount Haircut Eligible Amount Sum a. Paid-up-capital 0 b. Share Premium 0
c. General reserve 0
d. Capital Reserve 0 e. Retained Earnings 0 Sum of core capital XXXXX XXXXX f. General Provision 20% g. Specific Provision 30% h. Revaluation Surplus or unrealized gain on:
i. fixed Assets (Property,
plant & equipment other than Intangible assets) 30% ii. investment in listed securities 20% iii. investment in non-listed securities (other than closed end mutual fund) 35% iv. investment in strategic holding 25%
i. Preference Share 25%
j. Subordinated debt
@20% of total issued value

Sum of supplementary capital XXXXX XXXXX Total Capital XXXXX XXXXX

16550 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019
Part B
[rule (1)(b); rule 5(2)]
Conditions in computing total capital (a) In the computation of supplementary capital, stock broker shall follow the value of investment in shares of exchange(s) as disclosed by the respective exchange; (b) Supplementary capital over three times of core capital shall not be eligible in computation of total capital; (c) Revaluation surplus of intangible assets, if allowed, shall not be considered in supplementary capital; (d) The Commission may impose additional haircut or change the haircut against any components of the supplementary capital for any registered entity by order in writing; (e) The registered entity shall also follow the following in computing the value of components of total capital:
(i) Each registered entity shall maintain a mandatory provision at least @ 10% of profit after tax of last year as capital reserve and the full amount of such reserve shall be accounted for in computing total capital; (ii) Each registered entity those are providing margin financing shall maintain a mandatory provision @ 1% of all outstanding margin exposures:
Provided that if the Commission prescribes the maintenance of any specific provision, such provision shall also be eligible in computing the total capital with applicable haircut;

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16551 (iii) Each registered entity is allowed to account for revaluation surplus or unrealized fair value gain for fixed assets (i.e. property, plant & equipment) in computing total capital with applicable haircut of the total value:
Provided that revaluation of fixed asset shall be eligible in computing, only if the revaluation is not done in the last five years; (iv) Revaluation surplus for listed equity instruments and non-listed equity instruments at applicable haircut following the standard valuation principle and as disclosed in the Audited accounts; (v) Revaluation surplus for strategic holding shall be eligible to account for at applicable haircut following the standard valuation principle and as disclosed in the audited accounts; (vi) Any preference share having maturity equal or above seven (07) years shall be eligible in the computation of total capital with applicable haircut; (vii) Any long term Subordinated debt not below “A” rated having maturity equal or above seven (07) years is eligible in computation of total capital @ 20% of the total value in each year after two years of the issuance of the subordinated debt.

16552 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019
Schedule-D
Part A
[see rule 4(4)]
Statement of Total Risk Requirement Computation Area of Risk Computation Formula Risk Factor Applicable for Registered Entity Operation Risk Requirement (ORR) Based on Average Annual Gross Income (see clause (b) of sub-rule (7.1) of rule 7) 5% All Position Risk Requirement (PRR)
i. Proprietary positions in Equity
securities:
All
Value of "A" category securities 10% Value of "B/G/N/." category securities 12% Value of "Z" category instruments 15% Value of "OTC" category instruments 20% Value of Non-Listed Instruments 25%
ii. Proprietary positions in MFs & CISs: All
Value of listed funds 10%
Value of non-listed funds 3%
Value of AIFs 25%
iii. Proprietary positions in Debt
Instruments & ABSs:
All
Value of listed debt instruments 5% Value of non-listed debt instruments 10% Value of ABSs 10%

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16553
iv. Proprietary Position in strategic
investments:
All
Value of listed strategic investments 10% Value of non-listed strategic investments 25%
v. Proprietary Position in money
market Instruments:
All
Value of Government securities/ instruments 0.0 Value of commercial paper 10% Counterparty Risk Requirement (CPRR)
i. Exposure of credit facilities to Clients 8% Stock Broker,
Portfolio
Manager
ii. Exposure of Guarantee Provided to
counterparty
2% All
Underwriting
Risk
Requirement
(URR)
Sum of Underwriting Commitment against the followings:
Merchant
Banker
i. Public Issue of Equity Instruments (IPO) 10%
ii. Public Issue of Equity Instruments
(Rights Issue)
15%
iii. Public Issue of Debt Instruments 15%
Large
Exposure Risk
Requirement
(LERR)
Sum of Large Exposures against the followings:
All
Sum of all Large Exposure to a Single counterparty 7% Sum of all Large Exposure to Single Equity 10% Sum of all Large Exposure to Debt Instruments 3%

16554 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 Liability Risk Requirement (LRR)
i. Exposure of Asset under Management
(AUM)
1% Asset Manager
(AM)
ii. Exposure of Fund Under Management
(FUM)
1% Fund Manager
(FM) iii.Exposure of Institutional Fund Under Management (IFUM) 0.25% Asset Manager, Merchant Banker and Portfolio Manager
iv. Annual Revenue Reported in last year 0.20% Credit rating
Company,
Stock Broker &
Stock Dealer,
Merchant
Banker and
Portfolio
Manager

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16555
Part B
[see rule 4(4)]
Framework of Total Risk Requirement Computation (TRR) The computation framework of the total risk requirement against each component of TRR shall be as following:
(1) Consideration of Operational Risk Requirement (ORR):
(a) A registered entity shall calculate its operational risk requirement in accordance with clause (b) to (d), unless otherwise specified by the Commission from time to time; (b) Calculation of the operational risk requirement: A registered entity shall calculate its operational risk requirement based on the following: (i) 5% of its average annual gross income, calculated in accordance with clause (c) and (d), for three immediately preceding financial years; or (ii) Tk. 1,000,000; whichever is higher; (c) “annual gross income” for a financial year means the total revenue less the sum of fee expenses, commission expenses, and interest expenses reported in the financial statements; (d) For the purposes of clause (c), the total revenue of the registered entity shall be adjusted by excluding the following:
(i)any realized profits arising from the sale of securities in that financial year that are classified as “held to maturity”; (ii) any extraordinary income; and (iii) any income derived from any insurance recoveries in that financial year.

16556 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 (2) Consideration of Position Risk Requirement (PRR):
(a) A registered entity shall calculate its position risk requirement

• in respect of all securities held by it as proprietary position,
  including those held pursuant to its intra-day activities following the formula below:
  Position Risk Requirement (PRR) = Value of each type of securities X Standard Risk Factor {Instrument wise} (b) In assessing the position risk requirement, the registered entity shall segregate the total holdings under its proprietary position and also consider the standard risk factor as per Part A of Schedule-D and make sum of the instrument wise PRR; (c) In calculating the position risk requirement, a registered entity shall fulfill the following conditions (i) shall calculate all proprietary positions held by it according to its category; (ii) shall calculate all its proprietary positions in listed securities on marking to market basis; (iii) shall calculate all its proprietary position in non-listed securities on fair value basis in each month as per international accounting norms; (d) Each registered entity shall follow the standard risk factor against each instrument under the capital adequacy framework; Provided that Commission may adopt alternative method of risk calculation in assessing the risk factor of each securities under the proprietary position;

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16557 Explanation in ambiguity: where a registered entity has a position in an instrument for which no treatment method is specified; then the registered entity shall immediately, in writing, seek guidance from the Commission on the treatment method to apply for such position, and until an appropriate treatment has been determined by the Commission, the position risk requirement shall be considered at cost value of the instrument. (3) Consideration of counterparty risk requirement (CPRR):
Each registered entity shall assess the counterparty risk in relation to margin financing; where the counterparty risk requirement shall be computed @ 8% on all Counterparty Exposures following the formula below:
Counterparty Risk Requirement (CPRR) = Sum of all outstanding counterparty exposure X Standard Risk Factor (i.e.8%) + Sum of guarantee outstanding X Standard Risk Factor (i.e.2%) (4) Consideration of underwriting risk requirement (URR):
(a ) The underwriting risk requirement of a registered entity shall be twenty percent (20%) of the underwritten commitment multiplied by the standard risk factor depending on the type of securities as per this Schedule; (b) The formula to compute the underwriting risk requirement (URR) shall be as follows:
Underwriting Risk Requirement (URR) = Sum of all underwritten commitment X 20% X Standard Risk Factor (Instrument wise).

16558 evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 (5) Consideration of large exposure risk requirement (LERR):
(a) General principle: Each registered entity is exposed to large exposure risk in relation to its position on the followings:
(i) its large exposure to a single client or counterparty including connected person thereof, if the exposure exceeds five percent (5%) of the registered entity’s Shareholders’ Equity less the revaluation surplus; Large Exposure Risk Requirement (LERR): Sum of all Large Exposure to a Single counterparty X Standard Risk Factor; (ii) its large exposure to a single debt instrument, if the exposure exceeds ten percent (10%) of the registered entity’s Shareholders’ Equity excluding revaluation surplus; and (iii) its large exposure to a single equity instrument, if the exposure exceeds five percent (5%) of the paid up capital of the issuer; (b) Computation of large exposure risk requirement: The computation of large exposure risk requirement against each exposure mentioned at clause (a) as following:
(i) LERR to a single client or counterparty: Sum of all Large Exposure to clients or counterparties X Standard Risk Factor ; (ii) LERR to single debt instrument: Sum of all Large Exposure to Debt Instruments X Standard Risk Factor; (iii) LERR to a Single Equity instrument: Sum of all large exposure to equity instruments X standard risk factor;

evsjv‡`k †M‡RU, AwZwi³, †g 29, 2019 16559 (c) Meaning of single client/counterparty: For the purposes of calculation, the expression "single client or counterparty" includes (a) Where such single client or counterparty is an individual; then, the individual, spouse of the individual, the partnership of which he is a partner, any partner of the individual, the spouse of the partner and all the companies or corporations over which the individual exercises control; Explanation : For the purpose of these rules, an individual is deemed to exercise "control" over a company or corporation if the individual or the individual’s spouse, single or jointly - (1) holds, directly or indirectly, more than fifty percent (50%) of the shares of the entity, (2) has the power to appoint, or cause to be appointed, a majority of the directors of the company or corporation, or (3) has the power to make, cause to be made, decisions in respect of the business or administration of the company or corporation, and to give effect to such decisions, or cause them to be given effect to. (b) where such single client or counterparty is a company or corporation; the company or corporation, its subsidiary, its related company or corporation and its associated companies; Explanation : For the purpose of this calculation, a related company is deemed to be an associated company of the company or corporation where the company holds, directly or indirectly, not less than twenty percent (20%) and not more than fifty percent (50%) of the issued share capital of such company.

16560 evsjv‡k †M‡RU, AwZwi³, †g 29, 2019 (6) Consideration of liability risk requirement (LRR). (a) A registered entity which undertakes the legitimate liability for investment management of any fund or institutional fund or involved in such evaluation services or any other services those may expose future liability to the registered entity; (b) A registered entity shall assess the risk requirement against its liability risk exposure as specified in this Schedule- D as per following formula: Liability Risk Requirement (LRR): Sum of all liability risk exposure X standard risk factor (as per this Schedule). By order of the Bangladesh Securities and Exchange Commission Dr. M. Khairul Hossain Chairman. †gvt ZvwiKzj Bmjvg Lvb, DccwiPvjK, evsjv‡k miKvix gyªYvjq, †ZRMuvI, XvKv KZ…©K gywªZ| †gvt Avãyj gv‡jK, DccwiPvjK, evsjv‡`k dig I cÖKvkbv Awdm, †ZRMuvI, XvKv KZ…©K cÖKvwkZ| website : www.bgpress.gov.bd