JS body wants reform in laws to protect general investors
Thursday, 26 November 2009
FE Report
The parliamentary standing committee on finance recommended for reforming laws so that no company can defer annual general meeting or deprive general investors of their due dividends, its chairman AHM Mostafa Kamal on Wednesday.
"We have asked the Securities and Exchange Commission (SEC) to come up with a bill, and we will see it passed in parliament for giving more protection to the investors," he said.
The standing committee discussed about capital market, its development and smooth functioning with all the stakeholders.
The committee also recom-mended introducing uniform face value and market lot for all shares, said Mr Kamal.
"Different face values create distortion in the market and we suggest to the market regulator to come with one figure - may it be Tk 10 or Tk 100 - and a uniform market lot," he said after a committee meeting.
The SEC should discuss the issue with all stakeholders, including Dhaka and Chittagong stocks, and take its final decision, he said.
"It is a sensitive matter and no decision has been taken, but when the final decision will be taken, it will be no longer a sensitive matter," he added.
The chairman said the committee suggested the SEC to formulate transparent rules and guidelines for private placement.
"The guideline should stipulate what percentage of shares for private placement, non-resident Bangladeshis and general investors," he explained.
In this way, a company cannot manipulate by placing maximum number of shares for private placement, Mr Kamal said.
About the mutual fund (MF) case, he said it is a subjudice matter and he cannot make any comment.
"The only thing I can say is to resolve the dispute as soon as possible for the benefits of the general investors," he said adding. "MF is not a company and a non-company unit cannot declare rights or bonus share."
The standing committee urged the SEC to be more cautious about approving new MF to float shares in the market, Mr Kamal said.
"Market demand should determine when the mutual fund should come into the market," he said.
The chairman said the government has taken decision to scrap direct listing method.
"It was introduced during the caretaker government to offload government shares, but there is no need of that right now," he said.
Issuers can float shares through book-building and initial public offering methods, he added.
The committee chairman said the market is operating well with huge turnover everyday.
"The government is trying to increase the capacity of SEC, DSE and CSE for smooth functioning of the capital market," he said.
The parliamentary standing committee on finance recommended for reforming laws so that no company can defer annual general meeting or deprive general investors of their due dividends, its chairman AHM Mostafa Kamal on Wednesday.
"We have asked the Securities and Exchange Commission (SEC) to come up with a bill, and we will see it passed in parliament for giving more protection to the investors," he said.
The standing committee discussed about capital market, its development and smooth functioning with all the stakeholders.
The committee also recom-mended introducing uniform face value and market lot for all shares, said Mr Kamal.
"Different face values create distortion in the market and we suggest to the market regulator to come with one figure - may it be Tk 10 or Tk 100 - and a uniform market lot," he said after a committee meeting.
The SEC should discuss the issue with all stakeholders, including Dhaka and Chittagong stocks, and take its final decision, he said.
"It is a sensitive matter and no decision has been taken, but when the final decision will be taken, it will be no longer a sensitive matter," he added.
The chairman said the committee suggested the SEC to formulate transparent rules and guidelines for private placement.
"The guideline should stipulate what percentage of shares for private placement, non-resident Bangladeshis and general investors," he explained.
In this way, a company cannot manipulate by placing maximum number of shares for private placement, Mr Kamal said.
About the mutual fund (MF) case, he said it is a subjudice matter and he cannot make any comment.
"The only thing I can say is to resolve the dispute as soon as possible for the benefits of the general investors," he said adding. "MF is not a company and a non-company unit cannot declare rights or bonus share."
The standing committee urged the SEC to be more cautious about approving new MF to float shares in the market, Mr Kamal said.
"Market demand should determine when the mutual fund should come into the market," he said.
The chairman said the government has taken decision to scrap direct listing method.
"It was introduced during the caretaker government to offload government shares, but there is no need of that right now," he said.
Issuers can float shares through book-building and initial public offering methods, he added.
The committee chairman said the market is operating well with huge turnover everyday.
"The government is trying to increase the capacity of SEC, DSE and CSE for smooth functioning of the capital market," he said.