Formation of clearing co hits snag as bourses fight for stakes

Mostafizur Rahman | Published: 00:05, Mar 28,2018 | Updated: 23:38, Mar 27,2018

 
 

The formation process of a clearing and settlement company has run into trouble as Dhaka and Chittagong stock exchanges have sought 70 per cent stakes in total in the company, going beyond the ceiling of 65 per cent.
Earlier, the Dhaka Stock Exchange sought the highest shareholding ceiling for a single bourse — 49 per cent — in the clearing and settlement company when the port city bourse did not mention any shareholding demand.
The Chittagong Stock Exchange has recently demanded 21 per cent stake in the company making the process deadlocked as the DSE is unwilling to lower its demand, said a CSE official.
The port city bourse has expressed its intention in a letter sent to the Bangladesh Securities and Exchange Commission and to the clearing company recently.
The BSEC on June 13, 2017 gazetted the central counterparty rules under which stock exchanges would jointly hold 65 per cent of the company’s shares with a provision that a single stock exchange would hold highest 49 per cent stake.
CSE managing director M. Shaifur Rahman Mazumdar told New Age, ‘We have demanded 21 per cent shares in the company as the board thinks that the stock exchange should be the main actor in the company. The bourses are discussing to resolve the issue.’
He said the regulations do not set the portion of shareholding by the bourses and the CSE’s demand was not illogical any way.
A DSE official said that the bourse was trying to find ways to mitigate the issue without lowering the bourse’s demand.
DSE managing director KAM Majedur Rahman told New Age that they were yet to get any formal letter from the CSE or the BSEC in this regard.
‘When the DSE will receive any letter, the board will make its decision on the matter.’
Senior BSEC officials said that the CSE move would certainly delay the process of the formation of the clearing company.
Under the central counterparty rules, a clearing and settlement company would
be formed for smooth settlement of transactions to be taken place at the bourses.
Apart from the allocation of 65 per cent shares for the bourses, banks and the Central Depository Bangladesh Limited would be entitled to get 15 per cent and 10 per cent
stakes respectively in the clearing and settlement company to be formed under the rules.
The rest 10 per cent shares would be kept blocked with the CDBL for a strategic partner.
The BSEC set the initial paid-up capital requirement for the central counterparty at Tk 300 crore. 

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