The Bangladesh Securities and Exchange Commission is going to replace over-the-counter market with alternative trading board where the shares of companies delisted from the stock exchanges’ main board and any public limited companies of any size would be traded.
The BSEC has recently framed the ATB rules and published the rules for public opinions.
BSEC officials said that any equity, corporate bond, derivatives and open-end mutual fund would be traded on the ATB platform.
They said that the companies at the ATB would enjoy various facilities including relaxed rules and penalties.
This would be a trusted platform where any company could sell its ownership to another company or individual.
There would not be any minimum or maximum paid-up capital requirement and the companies would not require declaring dividend and quarterly earnings disclosure.
Besides, any new products including sukuk could be traded on the platform.
The issuer will apply to the stock exchange rather than the BSEC for trading the shares of the company on the ATB. The exchange would accept or reject the application within 30 working days of receipt of such application.
The exchange would discontinue the ATB facilities for any securities with the request of the issuer company concerned.
According to the proposed ATB rules, buying or sales of securities at the ATB must be conducted by or through a stock-dealer or stockbroker of a stock exchange.
The stock dealer or stockbroker would place order in the system and settle the contract following the applicable settlement procedure, the rules said.
The stock exchange would determine all ATB fees, commissions and charges subject to approval of the commission.
‘[Stock] Exchange would also determine, time to time, the reporting requirements, disclosure requirements, information requirements subject to approval of the commission,’ the draft rules said.
The rules said, ‘The exchange or the commission may discontinue, halt or suspend any time, the buy or sale of any securities at ATB, if it is deemed to be proper in the interest of the investors and the capital market, after giving an opportunity of being heard to the issuer concerned.’
The commission made the approach to diversify and increase the depth of the market in accordance with its earlier plan.
The market has been remained vulnerable due to lack of depth and products. Investors have to invest in the same securities, which increases or drags down share prices irrationally. BSEC officials said that product diversification was the only way to cater to investors’ need.
The Dhaka Stock Exchange is well prepared to adopt the ATB while the Chittagong Stock Exchange is yet to be ready, they said.
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