The securities regulator is framing draft rules to establish Clearing Corporation as like as demutualised organisation to accelerate clearing and settlement activities of capital market, officials said.
Both the bourses and financial institutions have stakes in the proposed Corporation.
To ensure accountability and transparency, the rules of the Corporation will include a provision of appointing majority number of independent directors including the chairman.
The officials of the Bangladesh Securities and Exchange Commission (BSEC) said the Corporation will be established under an Act whose draft is being prepared along with formulating relevant rules.
"As the proposed Clearing Corporation will be a demutualised organisation, its majority number of directors will be independent as like demutualised stock exchange," said a senior official of the securities regulator.
The official also said the draft Act will be submitted to the Parliament by December this year.
The clearing and settlement are fundamental processes in the capital markets. After the trade is executed, the record is submitted to the clearing agency, which matches the buyer and seller record and confirms that the counterparts agree to the terms.
The agency reports discrepancies to traders in case the reports do not match, who then resolve them.
After the clearing process is performed, through settlement, agencies fulfill the delivery requirements of the securities object of a trade.
The settlement agency receives cash from buyers and securities from sellers and, at the end of the process, gives the securities to the buyer and the cash to the seller.
Presently, both the bourses perform the job of clearing and settlement with the help of Central Depository Bangladesh Limited (CDBL) in absence of any Clearing Corporation in the country's capital market.
The boards of demutualised stock exchanges are comprised of 13 members where seven are independent including the chairman.
"The regulator is yet to reach any decision regarding board structure of Clearing Corporation. Like demutualised exchange, the board of the corporation will also include majority number of independent directors," the BSEC official said.
He said the amount of stakes of the bourses and financial institutions in the Clearing Corporation will also be fixed after the completion of relevant rules.
"Initially, the regulator will have to play key role in establishing the corporation and appointing independent directors as per rules," the BSEC official said.
Asked, an official of the premier bourse said after formation of the proposed Clearing Corporation, the stock exchange will perform the trading activities only.
"The Corporation will shoulder risk managements along with executing clearing and settlement. The proposed corporation will reduce our pressure," said an official of the Dhaka Stock Exchange (DSE).
He said after establishment of Clearing Corporation, income of stock exchange will not be reduced as it will also have stakes in the corporation.
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Draft rules to establish Clearing Corporation being framed
Mohammad Mufazzal | Published: July 27, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
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