The depository authority has developed a mobile app that can instantly help investors become aware of any unauthorised transaction in their portfolios.
Currently, the Central Depository Bangladesh Ltd (CDBL) is conducting a test run of the app, intending to make it available and accessible through a formal inauguration shortly.
As a legal authority, the core function of the CDBL is to hold, record, transfer, and settle securities electronically, rather than rely on physical share certificates. So, an investor’s shareholding position recorded by the CDBL is the actual position of their assets.
However, brokers generate portfolio statements for their clients, using their back-office software.
According to insiders, brokers seeking undue profits sell securities from clients’ portfolios without their consent when they see a sudden upward trend in the market. Those portfolios may be adjusted when the market goes in reverse. There is a risk of brokers failing to repurchase securities to adjust portfolios. Whether brokers do adjust or not, selling clients’ assets without their permission is an unlawful act.
Several brokers, including Moshihor Securities and Tamha Securities, embezzled investors’ securities and kept them in the dark by providing them with fabricated statements that showed their assets intact. Later, regulatory scrutiny unveiled the scams committed by those brokers.
Such scams will be preventable with the help of the app that the CDBL has developed.
If a portfolio statement provided by a broker does not match with that of the CDBL app, the investor will know that unauthorised sales of his securities have taken place at the broker’s end.
Md. Abdul Mutaleb, managing director of the CDBL, said investors will be able to see his portfolio updated whenever any transaction will be made, using the app.
“After the ongoing test run, the app will be made available to investors. The app will add value to the CDBL’s services to investors,” said Mr. Mutaleb.
Another feature of the CDBL’s app will help investors know the valuation of his individual scrips and overall portfolio value as per the latest market price.
After being registered with the app, investors will see information pop up at the top of the app in their devices whenever any change happens in their portfolios.
Information regarding any corporate action linked to the disbursement of dividends will also be available through the app.
After the launch of the app, investors will be able to download it on their iPhones or android mobile sets. They will have the scope of making corrections relating to personal information, such as NID, bank accounts and addresses.
Moreover, the app will enable investors to open BO (beneficiary owner’s) accounts without the need to go to brokerage firms.
The CDBL has already applied to the Election Commission (EC), seeking an API (Application Programming Interface) connection to verify NIDs.
Once the connection is forged, CDBL officials said, investors themselves will be able to open BO accounts by verifying NID on the app.
Source: The Business Standard
Read More at: csslbd.net
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