SEC closer to allowing profit, loss sharing
FE Report | Wednesday, 25 February 2009
The Securities and Exchange Commission (SEC) Tuesday gave approval to the Asian Insurance Limited to raise Tk 90 million through initial public offering (IPO).
The commission also cancelled licences of two merchant banks on violation of securities rules and approved, in principle, amendment to merchant bank rules for introducing a profit/loss sharing system between merchant banks and their clients.
It has also temporarily suspended the rules requiring submission of national ID card with an application for IPO subscription as the Election Commission's website is not at present accessible due to its upgradation.
The decisions were taken in a regular 'commission meeting' chaired by its Chairman Faruq Ahmad Siddiqi.
The insurance company, to be the 40th of its kind listed with the bourses, will issue 0.9 million shares with the face value of Tk 100 each. The Net Asset Value (NAV) is Tk 242 per share and Earning Per Share (EPS) is Tk 52.16 as of May 31, 2008.
The paid-up capital of Asia Insurance is Tk 60 million.
As per securities rules, after getting approval the prospectus will have to be published within 25 days.
On the other hand, the SEC cancelled licences of two merchant banks as they remained inactive after taking licences long ago.
The two merchant banks are Pangaea Partners (BD) Ltd, and Prime Securities and Financial Services Ltd.
With the latest cancellation, the number of cancelled licences stood at five.
The three other merchant banks, the licences of which were earlier cancelled by the SEC, are the First Securities Services Ltd, the Raspit Securities and Management Limited and Equity Valuation Research and Distribution Limited.
'The securities regulator has cancelled the licences of the two merchant banks as they remained inoperative despite getting licences,' a spokesman of the SEC told reporters after the meeting.
Earlier, the commission had directed the two merchant banks to begin their operation by December 31 last in accordance with the merchant banker licensing rules.
The securities regulator has, in principle, approved the decision, taken in a meeting earlier, to introduce a profit/loss sharing system between merchant banks and their clients by amending the merchant banking rules, in a move to develop professionalism in the market
The commission will publish the amended version in a newspaper for seeking public opinions. Then, it will give the rules a final shape.
'Profit/loss sharing on joint investments by merchant banks and their clients will develop professionalism in the market,' said Farhad Ahmed, executive director of the SEC.
The commission also cancelled licences of two merchant banks on violation of securities rules and approved, in principle, amendment to merchant bank rules for introducing a profit/loss sharing system between merchant banks and their clients.
It has also temporarily suspended the rules requiring submission of national ID card with an application for IPO subscription as the Election Commission's website is not at present accessible due to its upgradation.
The decisions were taken in a regular 'commission meeting' chaired by its Chairman Faruq Ahmad Siddiqi.
The insurance company, to be the 40th of its kind listed with the bourses, will issue 0.9 million shares with the face value of Tk 100 each. The Net Asset Value (NAV) is Tk 242 per share and Earning Per Share (EPS) is Tk 52.16 as of May 31, 2008.
The paid-up capital of Asia Insurance is Tk 60 million.
As per securities rules, after getting approval the prospectus will have to be published within 25 days.
On the other hand, the SEC cancelled licences of two merchant banks as they remained inactive after taking licences long ago.
The two merchant banks are Pangaea Partners (BD) Ltd, and Prime Securities and Financial Services Ltd.
With the latest cancellation, the number of cancelled licences stood at five.
The three other merchant banks, the licences of which were earlier cancelled by the SEC, are the First Securities Services Ltd, the Raspit Securities and Management Limited and Equity Valuation Research and Distribution Limited.
'The securities regulator has cancelled the licences of the two merchant banks as they remained inoperative despite getting licences,' a spokesman of the SEC told reporters after the meeting.
Earlier, the commission had directed the two merchant banks to begin their operation by December 31 last in accordance with the merchant banker licensing rules.
The securities regulator has, in principle, approved the decision, taken in a meeting earlier, to introduce a profit/loss sharing system between merchant banks and their clients by amending the merchant banking rules, in a move to develop professionalism in the market
The commission will publish the amended version in a newspaper for seeking public opinions. Then, it will give the rules a final shape.
'Profit/loss sharing on joint investments by merchant banks and their clients will develop professionalism in the market,' said Farhad Ahmed, executive director of the SEC.