Executive Summary
BO Account stands for Beneficiary Owners Account. It’s task is the maintain of the account holder’s buy/sale with the brokerage firms. Account holder have to agree to pay such fees, charges and deposits to the CDBL Participant, as may be mutually agreed upon, for the purpose of opening and maintaining the account, for carrying out the instructions and for rendering such other services as are incidental or consequential to the holder’s holding securities in and transacting through the said depository account with the CDBL Participant. Have to agree to be bound by The Depositories Act, 1999, Depositories Regulations, 2000, The Depository (User) Regulations 2003, and abide by the Bye Laws and Operating Instructions issued from time to time by CDBL. There are some simple tasks to open a BO account for the Bangladeshi people & have a good chance for the NRB. The NRB can invest in Bangladeshi share market as a percentage of 10% of whole stocks, shares and others existing securities.
A merchant bank is a financial institution which is primarily engaged in offering financial services and provides advice to corporations and to wealthy individuals. The term can also be used to describe the private equity activities of banking.
Merchant banks were allowed to operate with the hope of playing a meaningful role in salvaging the country's limping stock market, by generating fresh funds, following the 1996 stock market crash. So far, a total of 31 companies received merchant banking licenses from the Securities and Exchange Commission.
The tasks of a merchant bank are, underwriting, issue management, Portfolio Investment Management Services, Merger and Acquisition etc.
A merchant bank is a financial institution which provides capital to companies in the form of share ownership instead of loans. A merchant bank also provides advisory on corporate matters to the firms they lend to.
Today, according to the US Federal Deposit Insurance Corporation (acronym FDIC), "the term merchant banking is generally understood to mean negotiated private equity investment by financial institutions in the unregistered securities of either privately or publicly held companies." Both commercial banks and investment banks may engage in merchant banking activities. Historically, merchant banks' original purpose was to facilitate and/or finance production and trade of commodities, hence the name "merchant". Few banks today restrict their activities to such a narrow scope.
Objective of the study:
As finance major BBA holder the primary objective of the study is to identify and discus about the Merchant banking & BO account opening process in Bangladesh Following specific objectives:
1. Advantages & disadvantages of Merchant banking.
2. To know how the capital & money markets are moving.
3. How they operate the whole activity
4. What are the procedures of opening BO account?
5. What are the procedures for NRB?
6. The terms & conditions to open a BO account.
7. To know about merchant banking & the history of merchant banking
8. Merchant banking operations in
9. And to know the roles of merchant banking in
This is basically a descriptive research by nature and is prepared on the basis of secondary data.
The sources of these secondary data are, different web sites regarding the related issues.
Limitations of the Study:
Despite of the level best effort of the researchers, this article is not fully free of certain obvious limitations. The basic limitation of this article is its sole dependence on secondary data. Secondly, the sources of secondary data were very limited web page. Relevant data is not available regarding this field. For this reason the accuracy of this report depends on the accuracy of the information furnished by the secondary sources.
Introduction
The Investor hereby referred to as the Beneficiary Owner (BO), desirous of availing the services of the depository has to open an account, through designated Depository Participants of CDBL. A BO category and a BO type distinguish each BO account from others. BO category indicates that the account is either a Regular, Principal, Omnibus or Clearing account. BO type indicates whether the BO account is for an Individual or a Joint holder or a Company.
What Is BO Account?
BO Account stands for Beneficiary Owners Account. This is the account that holds you shares like an inbox holding all you emails.
All share from new IPO’s and most of secondary market shares are in electronic form and a BO account, owned by the investor, hold the electronic shares.
All NRB are requested to open a BO account through any one of the Brokerage houses of DSE by filling required forms and submitting required document.
The persons who are eligible for BO Account
1. All Bangladeshi nationals who are free from any restriction of the Government are eligible to open a regular BO account. .
2. All Bangladeshi nationals (Bangladeshi passport holders) who are working/living abroad can open NITA or FC Account. Foreign passport holders who are originally from
Types of BO account
· Regular BO Account
· Joint BO Account
· NRB BO Account
· Margin account
· Trading account
Form as a token of acceptance of the terms and conditions set out bellow.
2. CDBL shall allocate a unique identification number to (Account Holder BO ID) for the CDBL Participant to maintain a separate Account for account holder, unless the CDBL Participant to keep the securities in an Omnibus
4. The account holder shall be responsible for: (a) The veracity of all statements and particulars set out in the account opening form, supporting or accompanying documents. (b) The authenticity and genuineness of all certificates and/or documents submitted to the CDBL Participant along with or in support of the account opening form or subsequently for dematerialization; (c) Title to the securities submitted to the CDBL Participant from time to time for dematerialization; (d) Ensuring at all times that the securities to the credit of my/our account are sufficient to meet the instructions issued to the CDBL Participant for effecting any transaction / transfer; (e) Informing the CDBL Participant at the earliest of any changes in holder’s account particulars such as address, bank details, status, authorizations, mandates, nomination, signature, etc.;
5. The account holder shall notify the CDBL Participant of any change in the particulars set out in the application form submitted to the CDBL Participant at the time of opening the account.
6. Where account holder have executed a BO Account Nomination Form a) In the event of his/her death, the nominee shall receive/draw the securities held in my/our account b) In the event, the nominee so authorized remains a minor at the time of his/her death, the legal guardian is authorized to receive/draw the securities held in my/our account. c) The nominee so authorized, shall be entitled to all my/our account to the exclusion of all other persons.
7. The account holder may at any time call upon the CDBL Participant to close his/her account with the CDBL Participant provided no instructions remain pending or unexecuted and no fees or charges remain payable by me/us to the CDBL Participant. In such event he/she may close account by executing the Account Closing Form if no balances are standing to his credit in the account. In case any balances of securities exist in the account the account may be closed by the account holder in one of the following ways:
(a) By dematerialization of all existing balances in his account;
(b) By transfer of all existing balances in his account to one or more of his other account(s) held with any other CDBL Participant(s);
(c) By dematerialization of a part of the existing balances in the account and by transferring the rest to one or more of his/her other account(s) with any other CDBL Participant(s);
8. CDBL Participant covenants that it shall
a) Act only on the instructions or mandate of the Account Holder or that of such person(s) as may have been duly authorized by the Account Holder in that behalf.
b) Not effect any debit or credit to and from the account of the Account Holder without appropriate instructions from the
Account Holder.
c) Maintain adequate audit trail of the execution of the instructions of the Account Holder.
d) Not honor or act upon any instructions for affecting any debit to the account of the Account Holder in respect of any securities unless:
(i) Such instructions are issued by the Account Holder under his signature or that of his/its constituted attorney duly authorized in that behalf;
(ii) The CDBL Participant is satisfied that the signature of the Account Holder under which instructions are issued matches with the specimen of the Account Holder or his / its constituted attorney available on the records of the CDBL Participant;
(iii) The balance of clear securities available in the Account Holder’s account is sufficient to honor the Account Holder’s instructions.
e) furnish to the Account Holder a statement of account at the end of every month if there has been even a single entry or transaction during that month, and in any event once at the end of each financial year. The CDBL participant shall furnish such statements at such shorter periods as may be required by the Account Holder on payment of such charges by the Account Holder as may be specified by the CDBL Participant. The Account Holder shall scrutinize every statement of account received from the CDBL Participant for the accuracy and veracity thereof and shall promptly bring to the notice of the CDBL Participant any mistakes, inaccuracies or discrepancies in such statements.
f) promptly attend to all grievances / complaints of the Account Holder and shall resolve all such grievances /complaints as it relate to matters exclusively within the domain of the CDBL Participant within one month of the same being brought to the notice of the CDBL Participant and shall forthwith forward to and follow up with CDBL all other grievances / complaints of the Account Holder on the same being brought to the notice of the CDBL Participant and shall Endeavour to resolve the same at the earliest.
9. The CDBL Participant shall be entitled to terminate the account relationship in the event of the Account Holder:
(a) Failing to pay the fees or charges as may be mutually agreed upon within a period of one month from the date of demand made in that behalf;
(b) Submitting for dematerialization any certificates or other documents of title which are forged, fabricated, counterfeit or stolen or have been obtained by forgery or the transfer whereof is restrained or prohibited by any direction, order or decree of any court or the Securities and Exchange Commission;
(c) Commits or participates in any fraud or other act of moral turpitude in his / its dealings with the CDBL Participant;
http://www.cdbl.com.bd/pdf/agreement.pdf
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