"The depository participants (DPs) should take steps to update their BO accounts or close the false ones and send a list of these and the number of valid accounts to the Commission within the next three weeks," the SEC in a letter asked the DPs.

A copy of the list of updated or closed BO accounts should also be sent to the Central Depository Bangladesh Limited (CDBL), the service provider of the central depository system, the SEC said.

In case of buying shares of the companies traded electronically in the bourses or applying for the initial public offers (IPOs), a person needs to open a BO account with a depository participant of the CDBL.

However, various errors take place while opening BO accounts, such as filling the forms improperly, absence of signing contracts between DPs and the account holders, lack of all necessary information and not forwarding these information to the central depository system, the commission explained.

The directive came after a SEC probe team detected some 32,000 fake BO accounts opened with a number of DPs apparently to secure maximum shares in Premier Bank IPO subscription.

The Commission on February 12 suspended a Tk 55 crore public floating of Premier Bank after around 25,000 BO accounts suspected to be fake had been found in an investigation.

The regulator formed a four-member inquiry team led by Monsur Alam, executive director of SEC, for further investigation in this regard asking it to submit the report within 45 days.

The probe team found that DPs opened many BO accounts that do not have proper documents and many of them are false. These BO accounts flout the rules and it is a criminal offense, the SEC letter cautioned.

If a DP does not have any incomplete or fake account, it should send a list of the account holders to the Commission and a copy of the list to the CDBL.