FE Report (February 14, 2011)
The leaders of the bourses have expressed their inability to devise a valuation method for margin loan due to limitations in the existing rules and regulations, officials said.
They said only the stock brokers can fix separate valuation to provide margin loans to their respective clients.
The leaders said that they would sit Monday with the officials of the Securities and Exchange Commission (SEC) to settle the issue.
Recently, the SEC asked the stock exchanges to devise a valuation method for providing margin loans to their clients. They were also asked to submit the structure of margin valuation to the SEC by February 10.
Fakhor Uddin Ali Ahmed, the president of Chittagong Stock Exchange (CSE), said in the absence of necessary provision in the existing laws of the stock exchanges, they are not in competent bodies to finanlise a valuation method for margin loan distribution.
"The existing rules and regulations of stock exchanges do not permit us to fix the valuation method," Mr. Ahmed told the FE.
"The sanctioning of margin loans depends on the relation between the lenders and their clients. That's why the stock brokers cannot devise the valuation method for margin loans," Ahmed said.
They said only the stock brokers can fix separate valuation to provide margin loans to their respective clients.
The leaders said that they would sit Monday with the officials of the Securities and Exchange Commission (SEC) to settle the issue.
Recently, the SEC asked the stock exchanges to devise a valuation method for providing margin loans to their clients. They were also asked to submit the structure of margin valuation to the SEC by February 10.
Fakhor Uddin Ali Ahmed, the president of Chittagong Stock Exchange (CSE), said in the absence of necessary provision in the existing laws of the stock exchanges, they are not in competent bodies to finanlise a valuation method for margin loan distribution.
"The existing rules and regulations of stock exchanges do not permit us to fix the valuation method," Mr. Ahmed told the FE.
"The sanctioning of margin loans depends on the relation between the lenders and their clients. That's why the stock brokers cannot devise the valuation method for margin loans," Ahmed said.
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