The Securities and Exchange Commission (SEC) has annulled the compulsory submission of bank certificate, earlier required to update or open a Beneficiary Owner's (BO) account, considering the investors' financial burden on account of high charges coerced by bank branches.
'From henceforth, an investor is allowed to submit a photocopy of his national voter ID card with his signature, or a bank certificate for updating a BO account,' an SEC spokesman told reporters after a meeting of the Commission Thursday.
The SEC also has extended the deadline for updating BO accounts up to September 30, 2008 from June 30, 2008 considering the problems faced by the general investors and depository participants.
However, a large number of investors have criticised the SEC for the previous decision taken 'abruptly,' under which investors have already deposited a good amount of money to collect bank certificates.
'The SEC should consider merits and demerits before taking any such decision, we are frustrated as the SEC decision has caused a lot of sufferings to us,' an investor said.
The latest decision has been taken against the backdrop of reports in the media that commercial banks are charging high fees on bank certificates, said Farhad Ahmed, executive director of the SEC.
At present, there are around 1.5 million (15 lakh) BO accounts and, of them, 40,000 are held by non-resident Bangladeshis.
The SEC has also decided in principle to amend mutual fund (MF) rules on rights or bonus.
'No close-end mutual fund will be allowed to issue pre-emptive rights shares to the existing unit shareholders and in no way, a close-end MF will be allowed to raise its capital through rights and bonus,' Farhad added.
The Commission will place advertisement in the national dailies seeking recommendations and opinions from the people before giving it a final shape.
Mutual fund rules will be reviewed as the Commission thinks the time is ripe in the backdrop of a huge demand for mutual funds from the investors' end.
About revision of MF rules, capital market expert Yawer Sayeed said, 'By definition, a close-end MF must have a definite tenure and may only change its capital position if revived at redemption.'
However, unfortunately in Bangladesh there are close-end MFs, which do not have any specific tenure as required by definition, and also a precedent has been set with close-end MFs allowed to declare stock dividend, he said adding that, therefore, the review of MF rules by the SEC is most welcome.
'Since by rule all MFs close annual accounts on June 30 every year. Therefore, such review just a few days before closure of annual accounts may not be viewed as investor-friendly by the general investors,' he commented.
Meanwhile, the SEC has approved initial public offering (IPO) applications of two companies-Standard General Insurance Company and Makson Spinning Mills.
The insurance company will raise its paid-up capital to Tk 150 million from the existing Tk 60 million through IPO. The insurance company is to raise its paid-up capital as per regulatory requirement. It will offer 0.90 million primary shares with the face value of Tk 100 each. Its net asset value (NAV) is Tk 126.70 and earning per share (EPS) is Tk 19.52. The authorised capital of the insurance company is Tk 300 million.
On the other hand, Maksons, the manufacturing company, will raise its paid-up capital to Tk 420 million from existing Tk 340 million through IPO. The company will raise its paid-up capital to pay its bank debt, offering 0.80 million primary shares with the face value of Tk 10 each. Its NAV is Tk 11.74 and EPS is Tk 10.69. The authorised capital of the company is Tk 500 million.
