DHAKA, DEC 22: Almost most half of the 25 institutions have so far formed separate entities in line with central bank and securities regulator order to be expired on December 31. The move was aimed at restructuring operations of brokerage and merchant banking firms to protect the interests of stock market investors.
The deadline was extended for the fifth time since March, with the regulators last deadline expiring on November 30.
 The Bangladesh Bank and the Securities and Exchange Commission (SEC) has reset December 31 as the deadline to give banks, financial institutions and insurance companies involved in stock business more time to set up separate companies.
Institutions, including AB Bank, Prime Bank, Mutual Trust Bank, Islami Bank, Trust Bank, EXIM Bank, Janata Bank, Agrani Bank, Sonali Bank, Southeast Bank and Prime Finance and Investment Ltd, have so far separated their brokerage and merchant banking arms.
More than 25 institutions, most of them banks, are running a stock brokerage business in addition to their core business.
 “We extended the deadline several times for practical reasons. It’s time-consuming to get registration for opening a new business,” said an SEC official Wednesday.
A top official of the non-banking financial institutions (NBFIs), on condition of anonymity, said, “We welcome the move but it is a very tough job to form separate companies. We need more time.”
Mostly NBFIs had failed to form subsidiary companies within the deadline set by the regulator.
On October 16, the SEC, in its last directive, said, “If banks, NBFIs and insurers fail to comply by November 30, they will be barred from offering credit facilities to share market investors from December 01."
In December 2009, the SEC ordered them to separate their merchant banking and stock brokerage units from the core business by March 2010.
The official noted that the subsidiary companies would have to comply existing and new rules and regulations introduced by SEC to run their merchant banking business and stock dealing activities properly.

Source:The Independent