The Securities and Exchange Commission (SEC) has asked all the merchant banks, brokerage
firms and other related institutions to give compensation to the small investors affected in the last year’s stock market debacle.

The commission ordered to Dhaka Stock Exchange, Chittagong Stock Exchange and Bangladesh Merchant Bank Association to submit implementation report on compensation package to the SEC by August, said a statement Tuesday. Some 209 brokerage firms under DSE, 79 under CSE and 28 merchant banks have been asked to take immediate steps regarding compensation.

  Earlier, the commission approved a set of recommendations forwarded by the scheme committee assigned to implement the package.

As per the compensation package, the retailers who had investment of below Tk 10 lakh at the crash time will get a waiver of up to 50 per cent of the interest on margin loans.

The adversely affected investors will have the scope to pay the remaining interest payment through quarterly installments in three years.

The affected people are also entitled to a 20 per cent quota in all initial public offerings -- public and private -- to be from July, 2012 to June, 2014.

In April, the scheme committee, led by Md Fayekuzzaman, managing director of the Investment Corporation of Bangladesh (ICB), submitted its recommendations to the SEC for approval. The government in October last year announced a stimulus package for stock market investors to restore stability in the market.

As part of the package, the government formed a seven-member special scheme committee on November 27 to identify small investors who incurred losses, and the amount they lost.

The Daily Independent/Bangladesh/ 11th July 2012