Directive Regarding Depository Accounts — BSEC — BD

SECI/CDSL/ 2.22/99- 568 Date: April 2, 2005

Directive

Whereas, recent inspections of the operations of certain depository participants have revealed that these depository participants have opened numerous irregular/fictitious BO accounts; and whereas, opening a BO account based on false information is a violation of the Depository Act and a punishable offense.

Therefore, under the powers conferred by Section 14 of the Depository Act, 1999 (Act No. 6 of 1999), the Securities and Exchange Commission hereby directs all depository participants to ensure that they properly examine/audit the BO accounts opened with them, regularize all irregular accounts (where correct documents are missing, e.g., the BO account opening application form is not properly filled, there is no agreement with the customer, not all information on the BO account application form is provided, not all information on the application form is entered into the Central Depository System, etc.), and close any fictitious accounts (if any).

Within the next three weeks, participants must comply with the above directive and submit a report (including details of how many accounts were regularized or closed) to the Commission, along with the total number of valid (verified) BO accounts as of the report date, and send a copy of the report to the Central Depository Bangladesh Limited. If a depository participant has no irregular or fictitious BO accounts, they must also inform the Commission within the said period, along with the total number of valid (verified) BO accounts as of the report date, and send a copy to the Central Depository Bangladesh Limited. Furthermore, participants must send copies of the reports submitted to the Commission/Central Depository Bangladesh Limited to the relevant stock exchanges.

For and on behalf of the Securities and Exchange Commission

Farhad Ahmed
Executive Director

Copy to:

All Department Heads, SECI
Chief Executive Officer, CDBL - It is requested that a copy of the notification be sent immediately to all depository participants.
Chief Executive Officer, DSE
Chief Executive Officer, CSE

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Issued under

Act No. 6 of 1999Not in RegAlert
“under the powers conferred by Section 14 of the Depository Act, 1999 (Act No. 6 of 1999)”