Most of the listed companies have failed to comply with a directive that asked them to set their own rules for disclosing data that may influence stock prices though the deadline passed seven and a half months ago.
The new deadline is January 31, 2024.
According to the Bangladesh Securities and Exchange Commission (Prohibition of Insider Trading) Rules 2022, all listed companies must have own guidelines on material information and price sensitive information, intended to protect the interest of general investors from insider trading.
Most capital markets have a mechanism to prevent insider trading. An individual having an access to inside information may have an unfair edge over other investors in trading assets. Hence, he/she could potentially make larger profits unfairly than other investors.
To thwart such attempts, Bangladesh first enacted the Bangladesh Securities and Exchange Commission (Prohibition of Insider Trading) Rules 1995.
That was repealed by the 2022 rules that got published on January 30 this year.
The latest rules require companies to publish guidelines on their websites within three months after the government issued a gazette placing the 2022 rules in effect.
Only a handful of companies, Square Pharmaceuticals for example, have published their PSI guidelines.
Mohammad Rezaul Karim, executive director and spokesman of the BSEC, told the FE, "We had to extend the time given that most companies did not publish their own PSI guidelines."
Asked why companies need own guidelines after the (Prohibition of Insider Trading) Rules, 2022 defines price sensitive information and the manner to publish them, Mr Karim said, "It [the rules] may not have covered every detail of every industry, every firm. To plug the loopholes, companies should make guidelines of their own."
Square Pharma cited the objective of the guidelines that it formulated for PSI.
On its website, it said, "These Principles are to provide an overarching governance framework for the determination of materiality and price sensitive information in accordance with the Bangladesh Securities and Exchange Commission (Prohibition of Insider Trading) Rules, 2022, and to ensure that all investors have equal access to material information that may affect their investment decisions and that such information is adequately disseminated in a fair and timely manner."
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