BSEC mandates separate BO accounts for govt securities auctions
Previously, intermediaries were permitted to operate a single BO account to manage transactions for all categories of clients
The Bangladesh Securities and Exchange Commission has directed stockbrokers and merchant bankers to open two separate beneficiary owner (BO) accounts for the auction and settlement of government securities (G-Sec) on behalf of their clients, as part of efforts to streamline the government securities market.
The market regulator issued the directive today (2 July), requiring all stockbrokers and merchant bankers to maintain two separate BO accounts with the Central Depository Bangladesh Limited (CDBL) exclusively for the auction and settlement of government securities.
Previously, intermediaries were permitted to operate a single BO account to manage transactions for all categories of clients.
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Under the new rules, intermediaries must maintain two separate omnibus business partner identifications (BPIDs) – one dedicated to corporate and institutional investors, and another for individual investors, provident funds, and gratuity funds.
Through this new directive, the commission amended Direction Number-4 of its previous directive issued on 18 September.
In the revised directive, the commission stated that each stockbroker or merchant banker shall open two separate BO accounts with CDBL for G-sec auction of the CDS application for the sole purpose of the auction and settlement of G-Sec on behalf of its customers.
It further states that the stockbroker's or merchant banker's BPID used for government securities auctions must be linked to the corresponding BOID (Beneficial Owner Identification).
The BSEC first issued its directive in 2024 to facilitate investor participation in the government securities market and support the development of the capital market.
The primary framework issued directions to stock exchanges, the depository, and other capital market intermediaries regarding participation in the primary auctions of Bangladesh Government Treasury Bonds conducted by the Bangladesh Bank, through the stock exchange platform.
The commission has now amended that framework to mandate the two separate accounts for treasury auctions.
