BO account opening through online to start in March

Staff Correspondent, Share market investors will be able to open Beneficiary Owners (BO) accounts online from March this year. The initiative to allow investors to open accounts online was taken a few months ago to increase their participation in the stock market.

Opening BO accounts will now be easier as investors would not need to go to brokerage houses physically.
The BO account opening rate fell significantly as it was compulsory for investors to go to brokerage houses, but they could not do so because of the Covid-19 pandemic.

Opening BO accounts online would not only increase the participation of investors in the capital market but there would also be fresh investments because of new BO accounts, causing trade volume to increase.

At present, investors need to fill up forms having several pages and submit lots of documents at the time of opening BO accounts, which is a time-consuming and complicated process.

But opening accounts online will remove the inconveniences of the manual process, and investors will be able to open accounts in the comfort of their own homes.

Investors have been using the current system to open BO accounts for a decade. To strengthen account safety, the stock market regulator has on different occasions introduced further requirements, such as asking investors to submit the KYC form, the national identity (NID) card number, the 13-digit bank account number, and the routing number.

There are allegations that lots of BO accounts being used for trading were made using fake information. Many people do not even know that someone has used their information to open accounts.

The capital market regulator said it wants to close such accounts.

“We are working continuously to complete the whole process of online BO account opening within February. We want to start digital BO accounts from March,” said Bangladesh Securities and Exchange Commission (BSEC) Commissioner Dr Shaikh Shamsuddin Ahmed.

Earlier, the regulator, through Central Depository Bangladesh Limited (CDBL), took some initiatives to minimise the number of accounts opened using fake information.

Online BO accounts will play a key role in minimising the number of such accounts, said Shamsuddin.

Some insiders and securities manipulators allegedly use various proxy accounts to manipulate the market, said Abu Ahmed, an honorary professor of economics at the University of Dhaka.

He said the securities regulator must have genuine information about the BO accounts where large transactions take place through proxies.

Dr Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue, said in a review the lack of transparency in BO accounts is a major weakness in Bangladesh’s capital market.

He emphasised ensuring greater transparency in the process of opening BO accounts to prevent any malpractice.

“It may be an unpopular suggestion, but if we want to see a transparent capital market in the coming years, we should properly identify the actual beneficiaries of BO accounts. To build a long-term foundation for the capital market, transparency is important,” he added.

To open BO accounts online, investors need to go to the CDBL website and select the “depository participant” option. They will then need to fill in the necessary information, including their NID card numbers.

Some information will be filled in automatically once investors submit their NID card numbers. After that, they will fill in banking information and will get a confirmation message if all the information is correct.

Investors will be able to pay BO account fees through online payment systems.

According to the CDBL, since its inception, 70.75 lakh BO accounts were opened in Bangladesh till 30 June last year.

The number of operable BO accounts stood at 25.81 lakh on 17 January this year.

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