BSEC launches new margin rules, signals reform in capital market
Business Report :
The Bangladesh Securities and Exchange Commission (BSEC) has repealed the Margin Rules, 1999 and introduced the new Bangladesh Securities and Exchange Commission (Margin Repeal) Rules, 2025. The government published a gazette notification Thursday confirming that the new rules, approved by the commission on 30 October, are now in effect.
Although the new regulations have come into force, any ongoing actions, cases, or legal proceedings initiated under the 1999 rules will continue without interruption. These cases will be resolved according to the old provisions to prevent legal complications and ensure investor protection.
Earlier, BSEC had released a draft of the new rules and invited public feedback until 3 September. The updated regulations require investors to maintain an average annual investment of at least Tk 5 lakh to qualify for margin loans, meaning students, homemakers, and retired individuals are generally excluded due to the financial risks associated with margin financing.
Under the new rules, margin loans can only be used to purchase shares, and cash withdrawals or fund transfers are prohibited. Investors with portfolios valued between Tk 5 lakh and Tk 10 lakh will receive margin at a 1:0.5 ratio, while those with portfolios exceeding Tk 10 lakh will qualify for a 1:1 ratio.
Only companies with a minimum free-float market capitalisation of Tk 50 crore are eligible for margin, while firms facing operational suspension, going-concern risks, qualified audit opinions, or financial distress remain excluded.
Investors must pay quarterly interest on margin loans either in cash or by selling shares, and brokerage firms may issue margin calls if equity falls below required levels, with the authority to sell shares without prior notice to prevent further losses.
Market analysts believe that allowing pending cases to continue under the 1999 rules will reduce confusion, limit legal disputes, and strengthen investor confidence, contributing to a more stable regulatory environment.
The new regulations are expected to enhance market discipline and encourage safer investment practices, marking an important step in the ongoing reform of Bangladesh’s capital market.