The Dhaka Stock Exchange has targeted to automate the trading system of its over-the-counter market by March this year after amending the existing OTC rules.
The trade volume at the OTC market of the country’s premier bourse increased to Tk 72.65 crore in 2017 from Tk 4 crore in the previous year.
Market experts, however, said the volume was scanty and the OTC market remained almost non-functional since its introduction in 2009.
DSE officials said the bourse recently set the target to automate the market to make it vibrant by allowing electronic transaction of shares on the platform without investors’ physical presence.
The restructured OTC market will be run under fresh regulations named ‘The Dhaka Stock Exchange (Over-the-counter Bulletin Board) Regulations’.
The bourse has moved to amend some provisions of the existing OTC rules that hinder smooth operation on the OTC platform, DSE officials said.
The shares of the companies which were delisted from the main board of the DSE are traded at the OTC market of the bourse.
Once the automation is completed, investors’ physical presence at the bourse’s OTC market will not be required as brokerage houses, which will fulfil the requirements of new rules, will be allowed to submit orders for share sales and purchase in favour of investors.
The companies are likely to be categorised such as ‘A’, ‘N’ and ‘Z’ like the companies are grouped in different categories on the main board of the stock exchange, said officials of DSE.
As per the existing OTC regulations, investors cannot negotiate the prices under the current OTC platform.
They said the automation of the OTC market would facilitate the shareholders of the companies listed with the market to negotiate prices of their shares.
The DSE has also decided to introduce at the same time a separate small-capitalised board where small companies and units of open-ended mutual funds will be traded, said an official of the bourse.
The small-cap board will be run under the existing alternative investment rules, they said.
Any small-capitalised company which intends to raise capital from the capital market would be listed at the small-cap board, they said.
However, the company’s paid up capital will have to be between Tk 5 crore and Tk 30 crore, they said.
The companies at the OTC market and small- capitalised board will have a chance to be listed at the main board of the bourse after fulfilling some requirements, said DSE officials.
The DSE in 2009 introduced the OTC market at the bourse following a Bangladesh Securities and Exchange Commission instruction.
Initially, the OTC market had 51 companies. The number of companies at the market later increased to 66.
After inception of the OTC market, three companies were shifted to the main bourse following improvements in their business.