The consultative committee of the Securities and Exchange Commission (SEC) in its meeting yesterday made a set of recommendations, such as relaxation of margin rule for brokers, financial adjustment of A category securities and reduction in settling trade in bourses by a day, to spur the market.

The recommendations are expected to come into force after necessary approval by the regulatory body. According to sources, the SEC may approve the recommendations in its meeting next week.

If approved, clients will be able

to buy shares of a company in A category the next day after selling scrips of another company in the same category in a day, but the brokers' margin requirements with the bourses will again go up to Tk 1 crore from the existing Tk 50 lakh. Besides, settlement of trades will be T+3 from existing T+4.

"Earlier, financial adjustment facility was given to the members. The clients will get this facility this time," said a member of the consultative committee.

After settling trades under T+4, at present, clients get shares on the fifth day but with the implementation of T+3, they will get shares on the fourth day. However, both the bourses plan to implement T+3

from March 1.

Reducing the free trading limit, the SEC on December 21 last year increased the members' margin requirements with the bourses from Tk 1 crore to Tk 50 lakh.

The business watchdog also decided to suspend creditextending facility by brokers to their clients to control excess liquidity in the market. Earlier, the brokerage houses could extend credit facility to their investors up to 67 percent on the value of a share.

The decisions came as indices of the bourses kept soaring in recent times and the market witnessed fresh flow of funds. The Dhaka Stock Exchange (DSE) general index on December 21 at

one stage crossed 2000 points mark although it dropped back to close at 1994 points.

The consultative committee in yesterday's meeting also recommended that companies in Z category who have net worth and hold annual general meeting regularly but can't declare the certain amount of dividend for acceptable reasons can be included in the central depository system.

The SEC Executive Director MonsurAlam is the convenor of the consultative committee while chief executive officers of the DSE and the CSE Salahuddin Ahmed Khan and Wali-ul-Maroof Matin and other three executive directors are members of the committee.