Experts and stakeholders have said any kind of ambiguity regarding exchange's authority in conducting inspections in premises of listed companies should be removed for the sake of investors and market as well.
They said this following the recent inactiveness of the Dhaka Stock Exchange (DSE) in conducting inspection due to an incident which raised questions regarding the inspection authority of the premier bourse.
The DSE, however, is awaiting the regulatory approval to the revised listing regulations which incorporated the provision of inspecting the premises of listed companies by the exchange to justify whether the companies' information are true or false.
The DSE submitted the revised listing regulations to the Securities and Exchange Commission (BSEC) on July 29, 2013.
The former chairman of the securities regulator Faruq Ahamd Siddiqi said the BSEC should not linger its decision regarding the authority of conducting company inspection by the exchange authority.
"The securities regulator can make it clear whether the exchange will conduct inspection or not," Mr. Siddiqi said.
The former president and incumbent director of the DSE Shakil Rizvi said exchange should conduct the factory visit by taking approval from the management.
"At the same time, a proper guideline regarding the exchange's authority in visiting listed companies should be visible," Rizvi said.
He said the gap, if there is any, between the understanding of the securities regulator and exchanges should also be addressed.
When asked, DSE Managing Director Dr. Swapan Kumar Bala said presently the DSE is working very cautiously so that any question does not arise.
"The DSE is also awaiting the regulatory approval to the amendment of listing regulations which will specify the exchange's authority in conducting the visit in factory premises," Mr. Bala told the FE.
A DSE official said the authority of conducting inspection is not mentioned directly in the existing listing regulations.
"The ambiguity regarding the exchange's authority in conducting inspections in premises of listed companies will be removed after getting regulatory approval to the revised listing regulations," the official said.
The DSE suspended the share trading of the Pharma Aids on February 5, 2014 as the company created impediments for DSE officials to visit the factory premise.
"The issuer company has failed to comply with its continuing obligations in respect of listing regulations by preventing the Exchange from carrying out its essential work to protect the greater interest of investors," said the DSE news posted on its website after the suspension of share trading.
Later, the premier bourse and the company were at loggerheads following over the authority of visiting a listed company by the exchange.
In its reply to a show cause notice, served by the DSE, the Pharma Aids said they had not committed any wrong by barring the DSE officials to visit the company premise.
The company then also said in a statement that the DSE itself breached the listing regulations.
"As per the section 6 (XXI) of the listing regulations, a company will provide relevant paper or document following the demand of the DSE. But in the listing regulation it is not mentioned about the sudden visit by the exchange without any prior notice or without asking for papers and documents," the company's statement said.
In this connection, the DSE said the company's operation status is also information.
"For example, a company has provided information stating that they are on operation. So, it's not possible for us to justify whether the company is on operation unless we visit this one," the DSE official said.
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