Four capital market subsidiaries of troubled non-bank financial institutions have been cleared to continue operating, while seven others have been given six months to address regulatory deficiencies, as their parent companies face licence cancellation proceedings.
The Bangladesh Securities and Exchange Commission (BSEC) decided the fate of 11 of the 12 subsidiaries at an emergency meeting on Monday, while the remaining firm had already received a separate compliance deadline.
The decisions follow Bangladesh Bank’s move to cancel the licences of nine financially troubled non-bank financial institutions, raising questions over the future of their stockbroking, merchant banking and asset management businesses.
Rather than applying a blanket decision to all 12 subsidiaries, BSEC assessed their financial condition and regulatory compliance separately.
Four firms were allowed to continue business because they had adequate net assets and met certain assessment criteria.
They are stockbrokers Premier Leasing Securities Broking Ltd and AVIVA Equity Management Ltd, and merchant banks PLFS Investments Ltd and Prime Finance Capital Management Ltd.
Seven others were found to have deficiencies involving net assets and compliance with securities laws and regulations. They have until 30 April 2027 to rectify the shortcomings.
The four stockbrokers in this group are Premier Leasing Securities Ltd, International Leasing Securities Ltd, Fareast Stocks and Bonds Ltd and PFI Securities Ltd.
Merchant banks IL Capital Ltd and GSP Investment Ltd, along with Prime Finance Asset Management Company Ltd, face the same deadline.
The remaining subsidiary, FAS Capital Management Ltd, had previously been given until 31 December 2026 to address its net asset shortfall and meet regulatory requirements.
The decisions were taken at BSEC’s 1,035th emergency meeting, chaired by Chairman Masud Khan, according to a statement issued by Executive Director and Spokesperson Md Abul Kalam.
The regulator did not disclose the size of the financial shortfalls or specify the other compliance deficiencies identified at the seven firms.
The review leaves four subsidiaries free to continue operations and eight under deadlines to address regulatory shortcomings, despite the licence cancellation process affecting their parent financial institutions.
BSEC did not order the liquidation of any subsidiary or specify what action would follow if the firms failed to comply within the deadlines.
