Bangladesh Securities and Exchange Commission

Life Insurance Tower (15th, 16th, 17th, and 21st Floor), 10 Dilkusha B/A, Dhaka-1000, Bangladesh.

SEC/CMARRCDI/2009-193/155

Date: December 09, 2013

Guidelines

Guidelines on Provisioning for Unrealized Losses in Own and Market Portfolios of Stock Brokers, Stock Dealers, and Market Makers

(1) Stock Broker/Stock Dealer:

By virtue of the power conferred under Section 20A of the Securities and Exchange Ordinance, 1969, the Commission provides the following benefits to stock brokers/stock dealers regarding the maintenance of provisions against unrealized losses:

• a) Stock dealers are granted the optional benefit of maintaining provisions against unrealized losses arising from the revaluation of shares held in dealer accounts as of December 31, 2013 (or according to the applicable financial year) in equal quarterly installments (20%) from December 2013 to December 2014 (or according to the applicable financial year); and

• b) Stock brokers are granted the optional benefit of maintaining provisions against unrealized losses arising from the revaluation of shares purchased through margin loans granted to clients as of December 31, 2013 (or according to the applicable financial year) in equal quarterly installments (20%) from December 2013 to December 2014 (or according to the applicable financial year).

However, these benefits apply only to provisions for unrealized revaluation losses arising in the year ending December 31, 2013 (or according to the applicable financial year). Additionally, revaluation losses for 2013 are included herein. Subsequent provisions (if any) must be maintained as specifically required. It is noted that availing the above benefits prohibits the payment of any cash dividends for the relevant financial year.

(2) Market Maker:

By virtue of the power conferred under Section 20A of the Securities and Exchange Ordinance, 1969, the Commission provides the following benefits to market makers regarding the maintenance of provisions against unrealized losses:

• a) Market makers (where applicable) are granted the optional benefit of maintaining provisions against unrealized losses arising from the revaluation of shares held in their own portfolios as of December 31, 2013 (or according to the applicable financial year) in equal quarterly installments (20%) from December 2013 to December 2014 (or according to the applicable financial year); and

• b) Market makers are granted the optional benefit of maintaining provisions against unrealized losses arising from the revaluation of shares purchased through margin loans granted to clients as of December 31, 2013 (or according to the applicable financial year) in equal quarterly installments (20%) from December 2013 to December 2014 (or according to the applicable financial year).

However, these benefits apply only to provisions for unrealized revaluation losses arising in the year ending December 31, 2013 (or according to the applicable financial year). Additionally, revaluation losses for 2013 are included herein. Subsequent provisions (if any) must be maintained as specifically required. It is noted that availing the above benefits prohibits the payment of any cash dividends for the relevant financial year.

By Order of the Bangladesh Securities and Exchange Commission,

Professor Dr. M. Khairul Hossain

Chairman

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Phone (P.C.S.): +880-2-9568101-2, +880-2-9561525, Fax: +880-2-9563722, E-mail: secbd@bdmail.net, Web: www.secbd.org, www.sec.gov.bd