The securities' regulator has moved to set a new provision to make use of proceeds from the Initial Public Offerings (IPO) available to investors through the websites of listed companies and stock exchanges.
The Bangladesh Securities and Exchange Commission (BSEC) has already finalised the provision which is likely to be approved soon.
Sources concerned say the condition of publishing IPO proceeds will be included in the list of other conditions which are set while approving the IPO proposals once regulatory approval is received in this regard.
As per the new provision, the issuer companies will give updates on the use of IPO funds available on the websites of the concerned companies and stock exchanges as well.
The regulatory move came as the shareholders remain in dark about the use of IPO funds despite the fact that the share holders reserve right to know about utilisation of the fund.
While approving the IPO proposal, the securities regulator attaches different conditions for the issuer company and issue manager in the IPO prospectus.
"The proposed condition of publishing IPO proceeds on the websites of issuer companies and stock exchanges will be imposed under section 2CC, which empowers the BSEC to impose conditions as per the Securities and Exchange Ordinance-1969," said a BSEC official.
As per the proposed condition, information on utilisation of IPO funds will have to be updated time to time until the IPO proceeds are completed, he said.
According to another BSEC official, the imposition of new condition will start with Shepherd Industries, which recently got regulatory approval to float shares under fixed pricing method.
As per the existing conditions, the issuer companies are required to furnish status report on utilisation of IPO proceeds audited by foreign affiliated auditors and authenticated by the Board of Directors to the Commission and the exchanges within 15 (fifteen) days of the closing of each month until such fund is fully utilised.
As per the revised public issue rules, the issue managers have also been involved with the IPO proceeds.
The shareholders, however, are not able to know the reports currently as those ones are not publicly available.
A BSEC official said many listed companies, with some exceptions, try to comply with the requirement of submitting reports on IPO proceeds.
Asked about the companies which have already been listed, the BSEC officials said their first target is to make the provision effective.
"Gradually, the provision will be applicable for all companies," an official said.
He said the companies' accountability would be enhanced after introduction of the new provision.