The country’s premier bourse, Dhaka Stock Exchange, is preparing a proposal to bring in amendments to a number of provisions of the demutualisation scheme after six years of enactment of the scheme.
The bourse has found that there are some provisions in the scheme that hamper development of the market, DSE officials said.
They said the stock exchange communicated with market regulator Bangladesh Securities and Exchange Commission regarding urgency of the amendments to the demutualisation act and was preparing proposal to submit it to the commission.
DSE officials said the bourse got little benefit from demutualisation due to a number of reasons including the provisions in the scheme.
They also said that it would take time to amend the demutualisation act which was passed in parliament in 2013.
DSE director Minhaz Mannan Emon told New Age that the DSE board would soon place its proposal regarding amendments to the demutualisation scheme before BSEC for the interest of the market.
There is imbalance of power between the managing director and the chief regulatory officer of the bourse that should be addressed, he said.
He said that the board faced troubles as the law barred the managing director of the board from any knowledge of regulatory affairs.
According to the DSE demutualisation scheme, separate regulatory affairs division will be created to oversee the regulatory functions of the exchange independently. It will be headed by the chief regulatory officer, reporting directly to the regulatory affairs committee.
‘MD of the exchange must be the ex-officio member of the board committees except the RAC and the appeal committee with voting right,’ the scheme said.
Therefore, the law bars the bourse and the market regulator to account the MD of DSE about the regulatory affairs that hurts the interest of the market, DSE officials said.
They said that the market regulator usually sought reason about any regulatory affairs from the MD despite the law barring him from any interference in the issue.
Moreover, the law also facilitates appointment of most of the officials of the bourse, staff allocation and regulatory plans by the CRO.
The demutualisation scheme mentions that RAC must ensure that the regulatory affairs division functions effectively and take measures necessary to create and maintain an effective regulatory environment to improve investor confidence and market integrity.
DSE officials said that lax enforcement and regulatory action facilitated errant people to continue their criminal activities at the market.
Besides, the bourse cannot terminate inefficient employees who have been working at the exchange for many years without any knowledge of technology or modern equipment, but enjoying huge salary, they said.
The demutualisation law says, ‘From the date of demutualisation, all the employees of DSE must still be the employees of DSE on the same terms and conditions as existing immediately prior to the date of demutualisation.’
DSE lacks efficient officials, which is also a major obstacle to the market development process, DSE officials said.
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