Dhaka Stock Exchange on Wednesday approved a set of proposals on restructuring initial public offering process as the bourse detected a number of lapses in the process that continued shattering investors’ confidence over the market.
The DSE’s board of directors at a meeting approved the proposals and decided to send those to market regulator Bangladesh Securities and Exchange Commission today for the commission’s approval.
DSE officials said that the bourse wanted amendment to the current book building method and would urge the commission to introduce ‘Dutch Auction’ system where the bidders must take the amount of shares at his/her quoted prices.
The bourse backtracked on its previous position in favour of a three-year lock-in period for placement shares and would now propose one year lock-in after the first day of trading at the stock
DSE officials said that a three-year lock-in could prevent flow of new IPOs.
They said the board discussed the current market situation with representatives of the Chinese consortium which is the DSE’s strategic partner.
The delegates proposed a number of measures and requested the bourse to start the process of implementation.
They proposed automating every official activity that is being currently conducted manually.
They urged the DSE to automate the IPO process including assessment process of the new companies’ financial statements, highlighting their deficiencies and current status of the IPO.
Information disclosure process by the listed companies must be automated, they proposed.
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