Twenty-six banks are going to be shareholders of Central Counterparty Bangladesh Limited, a proposed clearing and settlement company.
The company will settle trading of equities, which will reduce settlement risk, provide trading anonymity and make the settlement operations more efficient. Currently, settlements are done through Central Depository Bangladesh Limited.
The banks are Agrani Bank, Bank Asia, BRAC Bank, Dhaka Bank, Eastern Bank, IFIC Bank, Jamuna Bank, Mercantile Bank, Modhumoti Bank, Mutual Trust Bank, National Bank, NCC Bank, NRB Bank, NRB Commercial Bank, NRB Global Bank, ONE Bank, Prime Bank, Pubali Bank, Rupali Bank, Shahjalal Islami Bank, Social Islami Bank, Southeast Bank, Standard Bank, City Bank, Premier Bank and United Commercial Bank, DSE officials said.
CCBL will allocate 15 per cent of its shares worth Tk 45 crore to the banks — equal number of shares to each bank.
As per the CCP rules, the banks cannot get the licences for participation in the clearing and settlement mechanism as they own shares in CCBL.
Market experts raised their eyebrows with the banks’ increased interest in becoming CCBL shareholders when the banks could be more benefitted from the clearing permission than being just a shareholder of the company.
As per the finalised rules, stock exchanges jointly hold 65 per cent of the company’s shares. Of the stock exchanges’ portion, Dhaka Stock Exchange holds 45 per cent and Chittagong Stock Exchange 20 per cent.
Banks hold 15 per cent of the company and Central Depository Bangladesh holds 20 per cent that includes 10 per cent to be transferred to a strategic investor.
The company will be registered under the name of ‘Central Counterparty Bangladesh Limited’ with an authorised capital of Tk 500 crore and paid-up capital of Tk 300 crore. A total of 30 crore shares will be issued at face value of Tk 10 each.
BSEC at a commission meeting on November 27 also accepted the memorandum of association and article of association of CCBL in accordance with the reports submitted by CCBL formation committee.
The board of the company will be formed with seven independent directors, six shareholding directors and a managing director.
DSE chairman Abul Hashem and managing director KAM Majedur Rahman, CSE managing director Saifur Rahman Mazumder, CDBL vice-chairman AKM Nurul Fazal Bulbul and Mutual Trust Bank chief Executive officer Anis A Khan have become shareholding directors of the company. The rest one shareholding director would come from a strategic investor.
The independent directors would be nominated later with BSEC approval.
The company will soon apply to the Registrar of Joint Stock Companies and Firms for registration of the company.
CCBL will provide clearing and settlement by settling fund obligation with multilateral netting, settling scrip obligation with multilateral netting and by managing defaults.
It will also provide securities borrowing-lending by providing a SBL platform as intermediary, managing SBL risks and settling SBL obligations.
The company will provide risk management for each and every trade by managing collateral.
BSEC and the bourses took the initiative to form the company to facilitate introduction of new products in the country’s capital market.
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