The DSE Brokers Association of Bangladesh (DBA) has thrown its weight behind the Bangladesh Securities and Exchange Commission’s (BSEC) proposed overhaul of margin lending rules, backing the regulator’s planned easing of the framework before the draft is released for public consultation.
In a statement issued on Saturday, the brokers’ body said the proposed amendments to the Bangladesh Securities and Exchange Commission (Margin) Rules, 2025 would help establish a more balanced, modern and market-oriented regulatory framework for the capital market.
The statement follows BSEC’s approval last week of draft amendments designed to simplify margin financing, widen investor access and revise the eligibility criteria for securities qualifying for margin loans.
The draft would replace the existing slab-based financing structure with a uniform equity-to-loan ratio of 1:1 for all eligible investors. Under the current rules, investors with portfolios worth Tk5 lakh to Tk10 lakh can receive margin loans at a maximum ratio of 1:0.5, while those with portfolios of Tk10 lakh or more qualify for a 1:1 ratio.
It would also lower the margin call threshold to 70 per cent from 75 per cent, while retaining the forced-sale threshold at 50 per cent of the outstanding margin loan.
The proposed amendments would also allow B-category companies to qualify for margin financing without meeting the current requirement of paying at least 5 per cent annual dividends.
For banks, non-bank financial institutions and insurance companies, the regulator plans to replace price-to-earnings ratios with price-to-book ratios in determining eligibility. It also proposes calculating P/E ratios using the latest audited annual financial statements instead of earnings from the latest four consecutive quarters.
The DBA said its representatives and those of the Bangladesh Merchant Bankers Association (BMBA) attended a meeting with BSEC last week, where they presented proposals and concerns on the draft rules.
According to the association, the regulator assured participants that stakeholders’ recommendations would be considered before the amendments are finalised.
The association said it expects the draft to be published shortly for public consultation and will submit detailed recommendations after reviewing the proposed amendments.
DBA President Saiful Islam said the association fully supported BSEC’s broader reform agenda to build a stronger, more modern and investor-friendly capital market and would continue working closely with the regulator on future reforms.
The margin lending overhaul is part of a broader package of capital market reforms pursued by the current BSEC leadership, including plans to ease listing requirements, introduce direct listing for eligible non-government companies, reform mutual fund regulations and introduce intraday trading.
