A committee of the securities regulator has recommended formation of a Clearing Corporation like a demutualised organisation, having majority number of independent directors in its board for the sake of ensuring transparency and accountability, officials said.
The Bangladesh Securities and Exchange Commission (BSEC) is working to formulate the rules on formation of the Clearing Corporation by reviewing recommendations made by the concern committee.
A Clearing Corporation is an institution that provides clearing and settlement services for financial and commodities derivatives and securities transactions.
Presently, the clearing and settlement department of the bourses are performing the job of settlement of daily transaction executed in the capital markets.
Arif Khan, a commissioner of the securities regulator, said the regulator has given first priority to the formulation of rules on venture capital and equity finance and Clearing Corporation.
"The structure of Clearing Corporation will be as like demutualised organisation where the board will include majority number of independent directors including the chairman," Mr. Khan said.
He said the BSEC will seek public opinion on draft rules of venture capital and equity finance by April this year.
"The rules on establishing Clearing Corporation will also be finalised by June this year. The regulator will seek technical assistance from Asian Development Bank (ADB) for introducing the Clearing Corporation," Khan said.
Most of the demutualised exchanges of other countries have separate Clearing Corporation.
The concern committee of the securities regulator has submitted its report on as to how the Clearing Corporation can be established.
According to the report, the ownership of the corporation will be limited among the institutes such as stock exchanges, banks and financial institutes.
The ownership of the Clearing Corporation will be separated from the management due to structure of demutualised organization.
The country's both the demutualised exchanges have to form their 13-member boards by appointing seven independent directors including the chairman.
Managing director of Dhaka Stock Exchange (DSE) Dr. Swapan Kumar Bala said both the bourses earlier proposed to establish unique Clearing Corporation.
"Our proposals included the demand of exchanges' majority stakes in the Clearing Corporation. However, we are not aware of the latest development of the Clearing Corporation," Mr. Bala said.
Another 3-member BSEC committee submitted its report recommending incorporation of a provision for creating closed-end Investment Fund (IF) in the proposed rules on private equity and venture financing to facilitate funding arrangements for prospective private firms.
The committee said investment managers will manage the investment funds by taking licence from the securities regulator. Such funds should also have trustee.
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