SEC gives 29 cos until Jan 1 to dematerialise shares
Wednesday, 22 July 2009
FE Report
The capital market watchdog has set January 1 next as the deadline for the 29 A-category companies to convert their paper-based shares into the electronic form.
The companies will be downgraded to the B-category unless they comply with the directive of the Securities and Exchange Commission (SEC) as per decision taken in the 'commission meeting' held Tuesday.
The companies, which are regularly holding their annual general meetings (AGMs) and have declared dividend at the rate of 10 per cent or more in a calendar year, are in the A-category.
Around 100 companies are now trading under the A category and all of them except the 29 companies dematerialised or converted their paper shares into the paperless electronic shares.
Under the electronic shares system, the shares purchased by investors are credited to their account instantly.
Not only that, all corporate information like bonus shares, shares under scheme of split, amalgamation and so on is also sent to the account automatically.
"Moreover, there is a slim chance of forgery in the case of e-shares," said Anwarul Kabir Bhuiyan, executive director of the SEC.
The commission also decided to forfeit 10 per cent of the money deposited with false applications for initial public offerings (IPOs) in the recently-concluded lotteries of three IPOs -- Bay Leasing and Investment Ltd, Asia Insurance Ltd and Rupali Life Insurance Ltd - for breaching securities rules.
As per securities rules, an applicant is allowed to submit two applications-individually and jointly - seeking allotment of IPO shares.
False IPO applications worth Tk 32.5 million were detected earlier. Of them, false applications involving Tk 21 million were submitted for Bay Leasing and those for Asia Insurance accounted for Tk 7.0 million.
The capital market watchdog has set January 1 next as the deadline for the 29 A-category companies to convert their paper-based shares into the electronic form.
The companies will be downgraded to the B-category unless they comply with the directive of the Securities and Exchange Commission (SEC) as per decision taken in the 'commission meeting' held Tuesday.
The companies, which are regularly holding their annual general meetings (AGMs) and have declared dividend at the rate of 10 per cent or more in a calendar year, are in the A-category.
Around 100 companies are now trading under the A category and all of them except the 29 companies dematerialised or converted their paper shares into the paperless electronic shares.
Under the electronic shares system, the shares purchased by investors are credited to their account instantly.
Not only that, all corporate information like bonus shares, shares under scheme of split, amalgamation and so on is also sent to the account automatically.
"Moreover, there is a slim chance of forgery in the case of e-shares," said Anwarul Kabir Bhuiyan, executive director of the SEC.
The commission also decided to forfeit 10 per cent of the money deposited with false applications for initial public offerings (IPOs) in the recently-concluded lotteries of three IPOs -- Bay Leasing and Investment Ltd, Asia Insurance Ltd and Rupali Life Insurance Ltd - for breaching securities rules.
As per securities rules, an applicant is allowed to submit two applications-individually and jointly - seeking allotment of IPO shares.
False IPO applications worth Tk 32.5 million were detected earlier. Of them, false applications involving Tk 21 million were submitted for Bay Leasing and those for Asia Insurance accounted for Tk 7.0 million.