The stock exchanges will conduct special audits of financial statements of 21 companies in the over-the-counter (OTC) market.
The exchanges will also physically visit 43 companies in the OTC market that are not in operation.
The Bangladesh Securities and Exchange Commission (BSEC) directed the stock exchanges in this regard on Tuesday.
OTC market is a facility provided by a stock exchange for buying or selling delisted securities from the exchange.
The stock exchanges will investigate all financial and non-financial information of those companies.
The exchanges will check the existence of land, building and property to assess their value.
Besides, the exchanges will scan the operational status of the companies and other relevant issues, if any.
These companies are not allowed to sell, mortgage, pledge, or transfer any of their properties and assets as well as the shares held by sponsors and existing directors without the commission's permission.
The commission will issue letters to each of the companies seeking information on their current position and condition of their operations very soon.
Besides, the commission will arrange a separate hearing for every company before taking regulatory steps.
Sources at the securities regulator said the commission wants to restructure OTC firms like Z category companies.
As a result, some firms will be able to perform properly and investors will get the benefit from them.
The BSEC has taken the initiative to lift up the OTC firms from the current miserable condition.
The regulator thinks these companies are not growing properly and their shareholders are not getting returns on their investments.
In many cases, investors lost almost all their investments in those companies. This is detrimental to the interest of investors and undesirable to the commission.
Market insiders said it is very important to restructure the OTC market. They need to be more accountable because investors have already lost their enthusiasm about trading in this market.
They also said it is important that an appropriate liquidation process is ensured before delisting the companies.
If it is possible to do this, the losses of the investors will decrease a little bit, they opined.
The DSE launched its OTC in October 2009 with 51 companies.
The companies were ousted from the mainboard to the OTC because of their underperformance or nonperformance in business, failure to hold shareholders' annual general meeting over the years, and for converting their own shares into electronic ones instead of paper certificates.
In the second phase, 29 more companies were sent to the OTC.
Later, 14 companies managed to come back to the main market by complying with relevant rules and performing better in their business.
Besides, six companies were delisted from the stock exchange.
Thus, the total number of securities under the OTC facility stood at 60 as of 1 October, 2020.