Panel formed to draft new regulations

The Bangladesh Securities and Exchange Commission (BSEC) has formed a committee to draft new regulations for stock exchanges’ self-listing in synchronisation with the Demutualization Act.

The committee headed by BSEC Executive Director Md Saifur Rahman has been asked to report back in 30 days. 

The five-member committee would make the draft Dhaka Stock Exchange (Self-Listing) Regulations, 2022 and Chittagong Stock Exchange (Self-Listing) Regulations, 2022 in line with the Exchange Demutualization Act, 2013.

Other members of the committee are Executive Director Mohammad Rezaul Karim, Director Md Abul Kalam, Additional Director Md Kawsar Ali, and Joint Director Mohammad Zahirul Haque.

Earlier, the securities regulator had instructed the two stock exchanges to submit reports on their achievements in demutualisation objectives and initiatives.

The regulator also wrote to the DSE and CSE to file a draft regulation on the self-listing or cross-listing process, including the issuance of Depository Receipts (DR) in compliance with the Exchanges Demutualisation Act, 2013.

The stock exchanges were also directed to appoint a compliance auditor to conduct a special audit within the next 30 working days.

According to the latest letter issued by the BSEC, the BSEC also asked the stock exchanges to submit service regulations without further delay.

According to the Stock Exchange Demutualisation Act 2013, 40 per cent of the DSE’s shares were credited to its members’ accounts, while the remaining 60 per cent were kept in a blocked account.

After selling 25 per cent of its shares from the blocked account to strategic investors, the bourse would float the remaining 35 per cent through an initial public offering (IPO).

After the stock market crashed in 2010, stakeholders demanded that the government ensure monitoring to stop manipulation and bring transparency to the stock market, to restore investors’ confidence. Following the demand, the Act was passed in parliament in 2013.

With the view to making it a more professional and profitable organization, the bourse went through demutualisation in 2013, a process that separated the bourse’s ownership from its management.

The Chinese bid reportedly also contained a technical package for more than $37 million of additional investment to overhaul the technology platform of the DSE. The SZSE alone has more than 1,000 people in its technology division.