Gazette on revised rights share issue rules published

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FE Report An official gazette notification on the revised rights share issue rules, enforced recently by the Securities and Exchange Commission (SEC) to ensure more transparency, was published Sunday, officials said. The SEC brought some major changes in its rights share issue rules. As per the revised rules, no issuer of a listed security can demand premium for rights share of the company, if it has not been in commercial operation for immediate past three years, maintaining a track record of profitability. Besides, an application for issuing rights share along with the offer document shall be furnished to the SEC for approval within 15 working days of approval by the company's shareholders in an annual general meeting (AGM) or extraordinary general meeting (EGM). At the same time, the issuer will have to post the rights share offer document in its website along with the websites of the SEC, the stock exchanges, and the issue manager within three working days from the date of approval in the AGM or in the EGM and shall remain posted until the closure of the subscription period. The SEC officials said another gazette notification on the sponsor-directors' mandatory shareholding is likely to be published soon. Meanwhile, the SEC got a clarification from the Dhaka Stock Exchange (DSE) on misleading figures of gainers and losers showed on the DSE website on December 4 (Sunday). On the day, the DSE software wrongly calculated the actual gain and loss made by 135 securities whose face-value were converted into Tk 10 each. The DSE calculated Sunday's closing prices taking into account Tk 10 as the face-value for 135 listed securities, but it kept Thursday's closing prices unchanged in accordance with the previous face-values and market lots. As a result, many shares which actually gained were shown as losers due to the programming errors. The SEC said although the DSE was given enough time to complete the share denomination process to bring back confidence among the investors, it failed to take necessary steps in time. A DSE official said their clarification mentioned that the DSE software, developed in 1988, takes the change in market price as equivalent to the difference between a day's last traded price (LTP) and the closing price of the day before. It could have been possible to avoid the errors, if a column of open adjusted price (OAP) could be inserted on the DSE website to calculate the change in market price based on OAP and yesterday's closing price (YCP). But it was not possible, as the DSE management needed to bring the change simultaneously in nearly 3,500 brokerage houses, the DSE clarification said. It said the errors could also be avoided, if the DSE adjusted the closing prices Saturday according to converted face-values. "But the law does not permit us to adjust any price on Saturday when no transactions take place at the bourses," the DSE said. However, on December 5 (Monday), the problem was solved automatically by the DSE software, as it took into account Sunday's adjusted prices.