1.01 lakh BO accounts opened from omnibus accounts

Merchant banks opened 1,01,263 beneficiary owners’ accounts in last four months for their clients, who previously traded through omnibus accounts, to comply with a Bangladesh Securities and Exchange Commission directive, a CDBL data showed.
According to the Central Depository Bangladesh Ltd data, of the BO accounts, 73,144 accounts were opened in between October 2012 to March 7 this year.
The rest 28,119 BO accounts were opened in the last 13 days, the data showed.
The practice of omnibus accounts was highly criticised by the probe committee that had investigated the stock market scam in 2010-2011.
The committee chairman, Ibrahim Khaled, termed the omnibus accounts as a ‘den of corruption’ and recommended transparency of such accounts.
An omnibus account is a type of account that holds 3,000 to 10,000 individual accounts which remain out of the surveillance of the regulators.
The CDBL data showed that the Investment Corporation of Bangladesh, a state-owned investment organisation, and its subsidiaries opened only 44,085 BO accounts for their around one lakh clients under omnibus accounts.
ICB principal branch opened 20,415 BO accounts, ICB Capital Management Ltd 9,124 BO accounts, ICML Rajshahi branch 6,489, Trust Bank Investment 5,627 BO accounts, ICML Chittagong branch 4,230 BO accounts and IDLC Investments Ltd 4,158 BO accounts for their clients who previously traded through omnibus accounts.
Of the firms which opened lowest number of BO accounts for clients under omnibus accounts, AAA Consultants and Financial Advisors opened 23 BO accounts while both Race Portfolio and Issue Management and Swadesh Investment Management opened 36 BO accounts.
There is no specific data on the number of clients who trade through the omnibus accounts of merchant banks, but, according to BSEC sources, the number is near about two lakh.
The number of clients who trade through the
omnibus accounts of the ICB and its subsidiaries is around one lakh, ICB sources said.
ICB Capital Management CEO Moshiur Rahman said, ‘We have almost completed the transfer process for 30 thousand clients’ accounts to individual BO accounts from the omnibus accounts.’
A senior BSEC official said, ‘We will soon ask all merchant banks to provide data on the transfer of their omnibus account to BO accounts.’
‘The BSEC has given them enough time for the transfer. Now, we are thinking to take actions against the merchant banks which have failed to comply with the directive,’ he said.
The BSEC on November 4 last year asked the merchant banks to transfer all omnibus accounts to BO accounts through own depository participants by December 31 last year.
Later, the BSEC on December 30 last year extended the deadline to February 28 this year as the merchant banks failed to complete the process of transfer within the deadline.
The BSEC order said merchant banks would have to open the BO accounts with required information about their clients and would get one month to update the information if required.
The BSEC also asked Central Depository of Bangladesh Ltd to provide the transfer facility for free. The CDBL will also transfer the rights and bonus shares which were bought before the transfer but will mature afterwards.
The margin loan account holders under omnibus accounts, who will be
transferred to BOs, will get their dividends or bonus from DPs as companies
and mutual funds will send the dividends and bonus to DPs.
The margin loan account holders also will not be allowed to deny rights shares without permission of their portfolio managers.