Citing a need to comply with relevant rules and for preparedness, listed companies have requested a two-month extension to the 30 July deadline to transfer shareholders' all undisbursed assets to the Capital Market Stabilisation Fund.
The Bangladesh Securities and Exchange Commission (BSEC) Chairman Professor Shibli Rubayat-Ul-Islam on 7 July wrote to the Bangladesh Association of Publicly Listed Companies (BAPLC) saying listed companies need to notify their shareholders a month prior to transferring any undisbursed dividends or unsettled shares to the stabilisation fund as stipulated in the relevant rule published at the end of June.
Earlier on 6 July, BSEC in a letter instructed the listed companies to transfer all the eligible cash and share assets to the fund by the end of this month which did not grant the companies the necessary 30 days to comply with the provision of BSEC Market Stabilisation Fund Rules 2021.
The regulator added a new item on the list of assets to be transferred to the fund –non-refunded public subscription money, which was not in the January 2021 notification where the regulator asked the listed firms and intermediaries to report their undisbursed or unsettled cash and stock dividends or un-allotted right shares.
BAPLC in its letter to BSEC said, to figure out the new item, listed companies need to go through many old documents as non-refunded subscription money relates to companies' inception or listing while many companies were listed even in the 1970s and 1980s.
On top of that, given the lockdown situation while most of the listed company offices are closed as per the government instruction, the association requested the regulator to grant them up to the end of September instead of July 30.
The stabilisation fund initiative
In the Bangladesh capital market, due to non-communication or a lack of bonafide will, there is a total sum of more than Tk20,000 crore shareholders' assets undisbursed within listed companies.
Of that, around Tk1,000 crore is the undisbursed cash dividends while the remaining Tk20,000 crore is in the form of undisbursed stock dividends, or un-allotted right shares.
The BSEC at the end of the last year asked the bourses to get the reports on the relevant figures held by listed companies and market intermediaries and finally published its relevant rules to utilise the assets in market stabilisation.
According to the rules finalised two weeks ago, a board of governors would administer the perpetual Market Stabilisation Fund and the state-owned Investment Corporation of Bangladesh (ICB) or any other designated investment firm would be the operator of the fund.
Issuers and intermediaries would transfer such assets undisbursed for at least three years to the Stabilisation Fund and the actual owner of the assets can reclaim theirs anytime showing proof to get their sum back in a month.
The fund would use the cash to buy securities to stabilise the capital market, while there are options to liquidate the securities assets for the sake of market stabilisation.
Claiming investors would also avail the interest accrued on their actual assets.
The Board of Governors would have 11 members including the representatives of all the stakeholders of the capital market.