A depository participant is an entity admitted to the central depository system that opens and maintains beneficial owner accounts and processes transfers, pledges and corporate actions through CDBL. A securities custodian is registered by BSEC under the custodial service rules to safekeep securities and related assets for clients, typically institutions and foreign investors, and to provide services such as settlement support, income collection and reporting. Some entities hold both statuses. Category labels in the depository system can resemble custody language, so an applicant should confirm which status its business model requires before applying to either body.

Participant status is generally available to categories of institution set out in the depository regulations, such as stock dealers and brokers, banks, merchant bankers, asset managers and custodians, with each category carrying its own eligibility conditions. Applicants are usually expected to be properly incorporated, to hold any underlying licence relevant to their category, to meet capital and infrastructure requirements, and to show that directors and key personnel are fit and proper. Because the requirements are updated from time to time, we check the current BSEC and CDBL materials for the relevant category before preparing any application.

A foreign custodian that wants to hold Bangladesh listed securities for clients will usually do so through a locally registered custodian, often a bank operating in Bangladesh, rather than by connecting to the depository from abroad. A foreign bank with a Bangladesh branch may be able to seek registration itself, subject to its banking licence, BSEC requirements and CDBL admission. In either case, foreign exchange rules, account structures for non-resident investors and repatriation procedures must be built into the arrangement. We advise global custodians on selecting, reviewing and contracting with a local depository participant or sub-custodian.

A typical file includes constitutional documents, board resolutions, details of shareholders and directors, evidence of capital and net worth, any existing banking or capital market licence, organisational charts, profiles of key staff, operational and risk management policies, anti-money laundering procedures, information on systems and security, and draft client agreements and fee schedules. BSEC may ask for further information or clarification at any stage. The most frequent cause of delay is inconsistency between documents, for example a business plan that describes services the policies do not cover. We review the full package for consistency before filing.

There is no single timetable a firm can rely on. The time taken depends on the completeness of the application, the category sought, how quickly BSEC and CDBL raise and resolve queries, and whether systems testing and connectivity are ready. Where the applicant also needs corporate, foreign investment or banking approvals, those steps can extend the overall schedule. We help clients plan realistically by sequencing approvals, preparing documents in parallel and anticipating likely questions, and we avoid promising dates that depend on regulatory discretion. A complete file usually moves faster than one assembled under pressure.

Often it does. Registration conditions and the applicable rules commonly require prior approval or notification for changes in ownership, control, directors or key management of a registered firm. The exact requirement depends on the size of the change, the category of registration and any underlying licence, such as a banking or brokerage licence, which may carry its own separate approval process. Completing a share transfer without the necessary consent can expose the firm and its directors to regulatory action and complicate the deal itself. We review the conditions before signing and build every approval into the transaction timetable.

A registered custodian or participant must maintain its eligibility conditions, including capital, qualified staff, systems and security, and must follow BSEC rules and CDBL bye-laws and operating instructions. Typical obligations include keeping accurate records for each beneficial owner account, segregating client assets, handling corporate actions and pledges correctly, applying know your customer and anti-money laundering procedures, submitting reports and paying fees, and renewing registration where required. Firms should also update client documents and internal policies when rules change. We offer periodic compliance reviews so that issues are identified and corrected before an inspection finds them.

Depending on its seriousness, a breach can lead to a show cause notice, directions to correct procedures, fines, suspension of particular activities, or in serious cases suspension or cancellation of registration. Client complaints, audit findings, reconciliation failures and inspection reports are common triggers. A careful, factual response submitted on time, supported by documents and a credible remediation plan, often limits the outcome. Where a decision is unfair or procedurally flawed, there may be scope for review or a challenge before the courts. We prepare responses, attend hearings and, where needed, take the matter to court on the firm's behalf.