Dhaka Stock Exchange mulls over seeking a guideline on disclosure of companies’ price sensitive information from Bangladesh Securities and Exchange Commission as DSE has detected loopholes regarding the issue in the Dhaka Stock Exchange (Listing) Regulations 2015.
DSE board of directors will submit its proposals in this regard to the BSEC after Eid holidays to combat the manipulation of shares, a senior DSE official said.
Any information and decision that the issuers of securities are obliged to disclose according to Securities and Exchange Commission Rules 1995 and have potentiality to have their impacts on share prices are called price sensitive information (PSI).
The DSE is planning to propose a guideline as it has detected ambiguity in the listing regulations that the companies misuse for illicit gain, he said.
DSE is not going to seek an amendment to the listing regulations as it was formed just three years back, rather it would ask the BSEC for a new guideline regarding the PSI that would give solutions to the problems the DSE is facing, he said.
There is a general trend that whenever the bourse asks any company whether it has any unpublished PSI behind irrational increase in the company’s share prices, it denies any possibility of undisclosed PSI behind the price hike, the DSE official said.
However, it has been observed that a number of companies made crucial decisions and disclosed their PSIs just a week after they had denied.
Some companies said that it was not logical to ask about any unpublished PSI as the companies were obliged by law to disclose PSI within 30 minutes of the decision.
Therefore, the DSE will request to widen the disclosure requirements.
It may propose to make it mandatory for companies to inform it about any informal decision that the board agreed to do in principle.
According to the DSE listing regulation, any listed company must disclose its price sensitive information within 30 minutes of the decision on such information to the exchange and the commission.
As per the current rules, the companies cannot disclose any decision that is not accorded by board and don’t have written declaration.
Companies might work on a matter for months before final decision, but information on the matter often leaked out in the market, DSE officials said.
DSE would also propose to introduce measures to control misuse of PSI by the insiders of companies, he added.
The BSEC might also open a separate window for disclosing PSI by the companies to rule out asymmetry of information in the market.
There is definitely a need for all listed entities to ensure its own control on PSI, senior BSEC officials said.