Any investor maintaining a minimum investment of Tk 20 lakh will be eligible as a qualified investor for trading securities listed on the SME platform of the bourses.
The figure is 60 per cent down from the existing Tk 50 lakh required to be a qualified investor, according to a notification issued by the Bangladesh Securities and Exchange Commission (BSEC) on Thursday.
The decision was taken to popularise SME companies on stock exchanges for the greater benefit of investors and entrepreneurs, said BSEC officials.
According to the notification, investors registered with the electronic subscription system (ESS) of the exchanges at the time of qualified investor offers (QIOs) and any investors maintaining a minimum investment of Tk 20 lakh in the listed securities at market value or cost, whichever is higher, as per portfolio statement, will be eligible as qualified investors for the purpose of trading on the small capital platform’s companies.
The conditions for qualified investors made it easier to expand the bourses' SME platform, said an official.
As per the notification, the Central Depository Bangladesh (CDBL) will provide detailed information on eligible investors on the basis of the conditions to stock exchanges on a quarterly basis and will register and update such a list of eligible investors accordingly.
The stock market regulator said that the stock exchanges will provide fully automated registration at no cost for the purpose of trading the listed securities on the SME platform.
On September 30, 2021, the Dhaka Stock Exchange launched the operation of its SME platform with the first listing of six companies.
The two companies, Master Feed Agrotec Limited and Oryza Agro Industries, entered the SME platform after floating Initial Public Offerings (IPO). Later, three more companies—Nialco Alloys, Krishibid Feed, and Mostafa Metal Industry --joined the SME platform.
Four SMEs that shifted from the OTC market to the SME platform four months ago failed to attract investors as they have been struggling to improve their financial performances. The companies are Apex Weaving and Finishing Mills Ltd, Wonderland Toys Ltd, Himadri Ltd, and Bengal Biscuits Ltd.
In November 2018, the BSEC gave final approval to the Qualified Investor Offer by Small Capital Companies Rules-2018 with some amendments.
Retail investors are not allowed to buy shares in the SME platform as the market tends to be more volatile because of price volatility.
As per BSEC rules, SMEs must have at least Tk 5 crore and not more than Tk 30 crore in paid-up capital after raising funds through an initial public offering.
The SME sector contributes 60 per cent to India's economy, about 70 per cent in China and Japan, but only 25 per cent in Bangladesh.
