BSEC will make IPO approval strategy public soon

The securities regulator will make its strategy of approving IPO (initial public offering) proposals public soon, officials said.
The regulatory move came over an ‘embarrassing situation’ of receiving a letter recently sent by Ministry of Finance (MoF) for ensuring 'strict' implementation of relevant rules and regulations while determining the prices of primary shares for the greater interest of general investors.
The Bangladesh Securities and Exchange Commission (BSEC), however, said their initiative of making public the IPO strategy has not been taken as part of replying to the letter of the MoF.
"Our strategy of allowing IPOs will be posted on website. We will clear the ways maintained while allowing a company to go public," said a BSEC policy maker.
The official sources of the securities regulator said the BSEC is unhappy over the MoF's advisory letter sent without taking approval of minister.
Former BSEC chiefs such Faruq Ahmad Siddiqi earlier also criticised the MoF's letter saying that ministry should solve any problem by conducting discussion with the regulator without sending such kind of letter as the BSEC itself is a regulatory body.
It was heard on Monday that the securities regulator has postponed the approval of IPO proposals temporarily following the letter of the MoF.
When asked, the BSEC policy maker ruled out such possibility saying that the approval to any IPO proposal depends on completing the queries made to the companies which submitted IPO proposals.
"After completing relevant queries, a company's IPO proposal is placed at the commission meeting. So, any delay on completing queries does not mean that the regulator has postponed the IPO approval," the BSEC policy maker said.
The MoF sent its letter on ensuring investors' interest to BSEC chairman Prof. M Khairul Hossain on December 17 last.
In the letter, the MoF quoted from a few sections of the Securities and Exchange Ordinance, 1969 and Securities and Exchange (Public Issues) Rules, 2006 that protect the interest of the investors.
"As per the section 2a (4), the commission will not determine the price of issues. But as per the Preface, section 8(1) and 8(2)(e) the objective and responsibility of the commission are the protection of investors' interest in securities, assurance of proper issues and scarping of manipulative business in the securities market," the letter of the MoF reads.
After receiving the MoF's letter, BSEC Executive Director Mohammad Saifur Rahman told the FE that the regulator always takes necessary steps to ensure the implementation of the rules and regulations while allowing any IPO proposal.
He said the BSEC time to time brought relevant changes in public issue rules to make these time befitting and also rejected some proposals of rights issue due to faulty process.
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