Photo : Collected
In a recent development, Central Depository Bangladesh (CDBL) has canceled staggering about 1 lakh Beneficiary Owners (BO) accounts of investors in the capital market during the first month of the current financial year, July. The reason cited for the cancellations was the failure to pay annual service charges or renewal fees.
According to CDBL data, as of June 30 this year, the number of BO accounts of investors stood at 18,60,774. However, by July 30, this number witnessed a significant decline of 93,224 to reach 17,67,550.
Out of the current BO accounts, 3,11,333 do not possess a single share in the stock market, making them susceptible to further cancellations. Consequently, the actual number of BO accounts in the capital market might soon drop to around 14 lakhs.
Data reveals that among the cancelled BO accounts, 69,035 belonged to male investors. On June 30, the BO accounts of male investors were recorded at 13,91,397. However, by July 30, it dwindled to 13,22,362. Similarly, 23,787 BO accounts of women investors were canceled during the same period. On June 30, the BO accounts of female investors numbered 4,52,532, but on July 30, it declined to 4,28,745.
Furthermore, the company's own BO accounts also experienced a decline by 402, going from 16,845 on June 30 to 16,443 on July 30.
Tariqul Islam, an affected investor, shared his experience stating, "A total of 10 BO accounts of my family members have been canceled this year. The brokerage house called me three times to pay the renewal fee for the financial year 2023-2024. But I have not renewed the BO accounts, so they were canceled." He cited the lack of promising companies entering the market via IPOs as the main reason behind not renewing the accounts.
Shakil Rizvi, managing director (MD) of Shakil Rizvi Stock Limited, explained, "Investors who seek to profit from the capital market with less risk mainly invest in companies that come through initial public offerings (IPO). However, in the year 2023, no significant company came forward for IPO, leading to non-renewal of BO accounts."
In response to the situation, AB Mirza Azizul Islam, the former caretaker government's finance advisor, expressed concern over low investor confidence leading to non-payment of renewal fees. He pointed out that many of the canceled BO accounts were omnibus BO accounts (ghost accounts) and emphasized the need to reduce unwanted BO accounts in the interest of the market. Furthermore, he urged action against investors who fail to comply with the law.
As per the rules, investors are required to pay the BO account renewal fee by June 30 every year. The amount is deposited in the respective brokerage houses, which then remit the fees to the two stock exchanges and CDBL.
TDM/SD
