BANGLADESH

The Securities and Exchange Commission (SEC) has approved a new set of book-building rules for listing of shares.

The amended rules were approved at the Commission's meeting on Tuesday evening, SEC spokesperson and executive director Saifur Rahman told bdnews24.com.

Since the catastrophic Dec-Jan collapse in the capital market, the book-building process has been a subject of intense debate. The finance minister later ordered the rules be suspended and amended.

On Aug 17, the Commission approved a draft set of amended rules.

As per the amended rules, at least 20 companies from the six categories must take part in the bidding, with at least three from each category. They must also mention how many shares each of them want to purchase.

Besides, no single company can purchase more than 5 percent of the shares, it says. However, there are no valuation caps, like PE ratio and NAV, for the issue price.

Also, to enter the bidding, a company must be approved by an international approval agency.

Institutional investors have been allowed a 40 percent quota under the new norms.

Asset management companies will now on be able to participate in the book-building process. However, any sponsor or director of such an institution will not be able to take part in the bidding.

Share lock-in period has been extended from 15 days to four months.

The two stock exchanges will function as observers in the book-building process.

The SEC will be able to audit, review and cancel any book-building process.

Tuesday's meeting also finalised a policy on placement which will be sent for notification, and a draft of rights issue rules, which will be sent for public opinion survey.