Overcoming Covid-19: Brokerage houses propose money whitening facility in capital market

Brokerage houses on Tuesday proposed to invest black money in the country’s capital market to overcome the Covid-19 crisis.

DSE Brokers Association (DBA) also sought additional funds as soft loans from the government’s stimulus package to bear staff salaries and other expenses.

The proposals were sent to the finance ministry and the Bangladesh Securities and Exchange Commission (BSEC).

DBA is the platform of trading right entitlement certificate (TREC) holders of Dhaka Stock Exchange (DSE).

The platform also proposed to reduce the AIT (advance income tax) on their every transaction value to 0.0015%, from 0.05%.

In the proposals, DBA President Sharif Anwar Hossain said that the bourse, its brokers and dealers had been incurring huge losses due to the prolonged shutdown.

Small traders were now hard pressed while staffers at the brokerage houses risked losing their jobs amid the coronavirus pandemic, he added.

He suggested undisclosed money investment opportunity could be used in secondary and bond market on a 1:1 basis.

For example, if an investor wants to invest Tk1 lakh black money in the capital market, he has to invest Tk50,000 in the secondary market and the rest in the bond market.

He also said black money invested in the bond market could not be withdrawn in three years.

Sharif said due to shutdown and ongoing general holiday, brokers were not earning commission from their investors, which was prime source of income in their business.

‘We urge for soft loan from the government’s stimulus package as working capital at 3% interest rate for the brokers so that they can pay staff salary and other office expenses,” he said.

The DBA also urged to waiver interest on margin loan of stock investors and waiver of BO account renewal fees for one year.