The DSE Brokers Association (DBA) has requested the securities regulator to reconsider the recent appointment of independent directors to the board of the Dhaka bourse, raising concerns over "conflict of interest".
The DBA on Thursday sent a letter in this regard to the chairman of the Bangladesh Securities and Exchange Commission (BSEC).
Three out of seven independent directors appointed by the regulator have conflict of interest, it said.
Without mentioning the names, DBA President Saiful Islam said two independent directors had affiliation with stock brokers. The other one is a representative of another regulatory body, he said, referring to the additional secretary of the Financial Institutions Division Dr Nahid Hossain chosen as one of the independent directors.
On September 1, the securities regulator appointed independent directors to the board of the Dhaka Stock Exchange, exercising the authority given under the demutualization act 2013.
"If there is any necessity of delivering order or instruction, the commission can deliver it to any stock exchange, or its shareholder or TREC (trading right entitlement of certificate) holder, or any committee and committee member," reads a provision of the act.
Based on a legal opinion, the DBA said it appeared that the particular provision of the act would have been more effectively and appropriately complied with had the BSEC formed a Nomination and Remuneration Committee itself for the hiring of independent directors. The committee could follow through the due process and comply with the demutualisation scheme.
The DBA president also said the BSEC had an option of forming an NRC to select candidates for the position of independent directors, which would finally be approved by the commission.
"Our demand is that independent directors be appointed through an NRC," Mr Islam said.
Meanwhile, the DBA on Wednesday issued a statement raising questions about the BSEC-approved independent directors as there are no chartered accountant and female representative among them.
After the August 5 change in the political landscape, all independent directors of both the Dhaka and Chittagong stock exchanges resigned upon a regulatory instruction.
Subsequently, the exchanges lost NRCs, each of which must have three independent directors out of five members.
In this situation, the BSEC appointed seven independent directors to the DSE board, saying the bourse had no scope of nominating independent directors in the absence of an NRC.
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