BSEC bars pvt cos from direct listing

Dhaka,  Sat,  03 December 2016
Published : 01 Dec 2016, 21:59:07

BSEC bars pvt cos from direct listing

FE Report


The securities regulator asked the country's both the bourses on Thursday not to allow direct listing of any private company.

The Bangladesh Securities and Exchange Commission (BSEC) issued a directive in this connection in the backdrop of misuse of the direct listing scope which led to a bubble before the 2010-11 stock market debacle.

The regulatory directive came following a plea of Aman Cement Mills for direct listing.

Aman Cement Mills recently applied to the Dhaka Stock Exchange seeking permission to be listed with the bourse directly as the listing regulations of the Dhaka and Chittagong stock exchanges allows such approval.

The BSEC directive was issued under Section 20A of Securities and Exchange Ordinance, 1969 by its chairman M Khairul Hossain.

Direct listing is a doorway to list with the exchange for the company which does not require to increase its existing paid-up capital but wants to list its securities for prestige, liquidity benefit or any other reason and its intent to offload the existing shares of the shareholders for privatisation purpose.

"Both the stock exchanges shall not exercise the provisions 8 to 10 of the Dhaka and Chittagong Stock Exchange (Listing) Regulations, 2015 for direct listing of unlisted securities of a company which is not owned by the government," the BSEC directive said.

The Khandkar Ibrahim Khaled-led probe committee blamed irregularities in direct listing of some private companies for the 2010-11 stock market debacle.

According to the provision 8 of the exchanges' listing regulations, the provisions 8 to 13 shall be applicable to direct listing of unlisted or re-listing of de-listed securities as specified by the commission from time to time.

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