The Bangladesh Securities and Exchange Commission (BSEC) has asked the Dhaka Stock Exchange (DSE) to follow the relevant rules in reviewing documents submitted by a new company while applying for an Initial Public Offering (IPO).
To get an authentic picture of a company, the commission directed the DSE to follow Public Issue Rules-2015 properly in a meeting held on the BSEC premises on Monday. Commission sources said there would also be similar directives for the Chittagong Stock Exchange (CSE).
Usually, a new issuer company has to submit its IPO documents to three organisations – the BSEC, DSE, and CSE. Stock exchanges then submit their observation reports to the regulator within 30 days.
Recently, the securities regulator has noticed stock exchanges do not follow the rules related to a public issue, mutual funds, or any securities laws properly in reviewing IPO documents.
The stock exchanges come up with recommendations instead of an observation report.
The regulator suggested that stock exchanges should only give the finding of any violation of the rules by the proposed company. There is nothing to be satisfied with the stock exchange here.
According to the public issue rules 2015, the exchanges shall submit its observation, if any, on the proposed of the public issue to the commission mentioning specific violations of Bangladesh Securities and Exchange Commission (public issue) rules, 2015, or Bangladesh Securities and Exchange Commission (mutual Funds) rules, 2001, or any others securities law, as applicable, and applicable financial reporting standards, within 30 days of receiving application.
Provided that if any exchange fails to submit its observation within the stipulated time, the commission shall assume the respective exchange has not observed the submitted documents of the issuer.
In October last year, the premier bourse formed a high-profile committee to review the IPO proposals in a bid to ensure the quality of the listings in the stock exchanges.