Phoenix Finance’s depository participant registration suspended for failure to renew documents

CDBL said the suspension will remain in effect until further instructions from the regulatory body

The Central Depository Bangladesh Limited (CDBL) has suspended the depository participant registration certificate of Phoenix Finance and Investments Limited for failing to submit the required documents for renewal on time.

The suspension took effect on 12 August, a day after the company’s depository participant licence expired on 11 August, according to a letter issued by CDBL to the non-bank financial institution.

CDBL said the suspension will remain in effect until further instructions from the Bangladesh Securities and Exchange Commission.

A depository participant licence allows a financial institution to open, maintain and close beneficiary owner accounts, dematerialise physical share certificates, facilitate electronic securities transfers and settlements, and provide clearing and custody services.

Phoenix Finance, a publicly listed non-bank financial institution, held a custody depository participant (DP) licence under CDBL. The licence allowed it to maintain its own securities accounts, provide custodial services to clients and manage clearing accounts for stockbrokers and dealers.

With the licence suspended, Phoenix Finance will not be able to provide these DP-related services to itself or its clients until the licence is renewed.

Phoenix Finance and Investments Managing Director Mohammad Sayduzzaman could not be reached over mobile phone for comment by The Business Standard.

Under Section 30(6) of the Depository (User) Regulations-2003, DP registration certificates must be renewed through the depository by submitting an application to the commission along with the required fee through bank draft or pay order.

The renewal fee is Tk50,000 for custody participants, valid for five years; Tk2,000 for trading participants; and Tk4,000 for other participants, with the latter two certificates valid for one year.

The rules require renewal applications to be submitted at least one month before the certificate expires. A daily fine of Tk500 is imposed for each day of delay.

Despite the expiry of its registration, Phoenix Finance failed to submit the required documents for renewal, according to CDBL.

The suspension comes as the non-bank financial institution faces severe financial challenges. Phoenix Finance incurred a net loss of Tk339.25 crore in 2025 and reported negative net assets of Tk1,699.56 crore as of 31 December 2025, according to its auditor’s report.

As part of its going-concern assessment, the auditor also examined the maturity profile of the company’s assets and liabilities to identify structural mismatches that could affect its liquidity.

The assessment found a net liquidity gap of Tk1,688 crore as of 31 December 2025, indicating a material funding deficit.

The auditor said these conditions indicated a material uncertainty that could cast significant doubt on the company’s ability to continue as a going concern.

Source: The Business Standard