Non-residents interested to invest in shares or securities enlisted with Bangladesh .Stock Exchange will be required to open a Non-Resident Investors' Taka Account with any authorised dealer or financial institution with freely convertible foreign currency remitted from abroad through normal banking channel. Bangladesh Bank said in Its recent circular to all authorised dealers in foreign exchange.

The circular provides the

specific instructions to all concerned banks, authorised foreign exchange dealers and Dhaka Stock Exchange about the modus operandl for Investment participation in the country's securities or stock markets by the non-resident persons or Institutions.

The government announced Its decision in early June 91, opening up the stock exchange to non-residents for investments. Bangladesh Bank took more than three months time to finalise the specific instructions, paving the ground for investments by the non-residents or foreigners tn securities or secondary exchange markets.

Knowledgeable sources however stated that the finalisation of specific guidelines for participation by the non-resident in the stock exchange would not still set the stage ready for actual Investments. Specific amendments to Capital Issuance Continuance Act of 1947 would be needed to withdraw the legal restrictions an such participation by the non-residents.

Meanwhile, non-rcsldenl persons or Institutions Interested to Invest in shares or securities, enlisted with Bangladesh Stock Exchange, will need to operate through a member of registered broker of stock exchange In Bangladesh, according the circular of Bangladesh Bank.

The foreign exchange remitted by them through the normal banking channel’ will be allowed to be converted Into Taka at the official rate of exchange for deposit with Non-Resident Investors Account. A non-resident investor, having a foreign currency account with any bank in Bangladesh, can also spen such a Non-Resident Investors’ Taka Account by transferring foreign exchange from that account. The foreign exchange so transferred will be deposited in the Non-Resident Investor’s Taka Account after conversion to Taka at the official rate of exchange.

The circular said, balance of such accounts can be utilised for purchase of Bangladeshi shares or securities through

members or registered brokers of slock exchange in Bangladesh. A certificate lo the effect that Ihe purchase has been made al Ihc market price prevailing on Ihc dale of purchase has lo.be obtained by the account holders or their nominee from Ihc slock exchange member or registered broker through when the shares or securities have been purchased the certificate must be submitted lo the aulhorised dealer maintaining Non-Resident Investors’ Taka Account.

The Non-Resident Investors' Taka Accounts can be operated by the account holders themselves or their nominees said the circular. Purchase and sale of shares or securities will be made only through a stock exchange member or registered broker and only the shares or securities of companies enlisted with the slock exchange can be purchased from the proceeds of such account

Dividend earnings on shores or securilics credited to the Non-Resident Investors' Taka Accounts will be allowed to be

remitted abroad in foreign exchange at the official rate of exchange as per request of the account holders or their nominees.

The portion of the funds remitted from abroad or transferred from foreign currency account and credited to the Non-Resident Investors' Taka Accounts but not utilised for purchase of shares or securities will be allowed to be remitted abroad at the request of the account holders or their nominees in foreign exchange at official rate of exchange. '

No loan facilities will be allowed for such accounts. The incidental expenses for purchase of shares or securities such as fees, commission, brokerage, etc payable to the Bangladeshis can be paid In Bangladesh taka from the accounts. The sale proceeds of the shares or securities purchased from the balance of Non-Resident Investors' Taka Accounts may also be credited to accounts of the shareholder.

In case of such sales, a certificate to the effect that the sale has been made at the

market price prevailing on the date of sale has lo be obtained from the slock exchange member or registered broker through whom the sale has been concluded.

The circular also slates that, after the shares or securities have been purchased by the non-resident Investors, the related certificates or scrips can be deposited or kept with any person or organisation nominated by Ihc account holders. The investors can as well take them (certificates or scrips) outside the country, if he so desires.

Procedural instructions for remittance of capflal gains arising out of sales of shares or securities purchased from the balahce of Non-Resident Investors. Taka accounts will be issued later by the central bank, the circular said. Such capital gains, net of applicable taxes, held in such an account and .the dividend on shares or securities, held in such accounts, can however be freely utilised for purchase of other listed shares or securities through the stock exchange. It added.