Traders at the premier bourse are saying the sponsor/directors of listed companies are yet to start buying up to fill their quota that the Securities and Exchange Commission recently set.
They say the SEC rule on sponsor directors' having at least 30 percent share of their companies is in conflict with another one of its regulations.
SEC on Nov 22 made it mandatory for sponsors, promoters and directors to hold 30 percent stake in listed companies, two percent minimum for each director, and reach that level in six months. SEC spokesman Saifur Rahman said the condition has been imposed in line with the Securities and Exchange Ordinance 1969.
But according to the Section 4 (2) to the Securities and Exchange Commission (Prohibition of Insider Trading) Rules 1995, no sponsor, director, officer, auditor, legal adviser or beneficiary owner will be able to sell, buy, give or receive shares of the company from two months before the year ending date of the company to the day the accounts are finalised by the board of directors, which is a total of six-month period. Companies get 14 days after the board finalises the accounts to submit them to the SEC.
Based on this restriction, if a company closes its year on Dec 31 its sponsor will not be able to buy a share from November to May 15.
There are 46 companies on the Dhaka Stock Exchange under the 30 percent requirement, of which 29 close their year on Dec 31. Eastern Bank Limited director Mir Nasir Hossain told a clear explanation was necessary from the market regulator.
"One of the rules will have to be changed," former SEC chairman A B Mirza Azizul Islam said commenting on the conflict.
SEC's former chairman Faruk Ahmed Siddiqui said the older guideline should stay as it was introduced to prevent schemes. "I think the deadline for buying up 30 percent can be extended to nine months instead of six."
Mizanur Rahman Chowdhury, a retail investors' leader, said the directors must buy shares for the sake of the market and urged the SEC to revise its regulations.
Similar recommendations came at a meeting of the FBCCI standing committee on share market on Nov 30. However, the SEC chairman and the member present were unwilling to speak to the press on the issue.
They say the SEC rule on sponsor directors' having at least 30 percent share of their companies is in conflict with another one of its regulations.
SEC on Nov 22 made it mandatory for sponsors, promoters and directors to hold 30 percent stake in listed companies, two percent minimum for each director, and reach that level in six months. SEC spokesman Saifur Rahman said the condition has been imposed in line with the Securities and Exchange Ordinance 1969.
But according to the Section 4 (2) to the Securities and Exchange Commission (Prohibition of Insider Trading) Rules 1995, no sponsor, director, officer, auditor, legal adviser or beneficiary owner will be able to sell, buy, give or receive shares of the company from two months before the year ending date of the company to the day the accounts are finalised by the board of directors, which is a total of six-month period. Companies get 14 days after the board finalises the accounts to submit them to the SEC.
Based on this restriction, if a company closes its year on Dec 31 its sponsor will not be able to buy a share from November to May 15.
There are 46 companies on the Dhaka Stock Exchange under the 30 percent requirement, of which 29 close their year on Dec 31. Eastern Bank Limited director Mir Nasir Hossain told a clear explanation was necessary from the market regulator.
"One of the rules will have to be changed," former SEC chairman A B Mirza Azizul Islam said commenting on the conflict.
SEC's former chairman Faruk Ahmed Siddiqui said the older guideline should stay as it was introduced to prevent schemes. "I think the deadline for buying up 30 percent can be extended to nine months instead of six."
Mizanur Rahman Chowdhury, a retail investors' leader, said the directors must buy shares for the sake of the market and urged the SEC to revise its regulations.
Similar recommendations came at a meeting of the FBCCI standing committee on share market on Nov 30. However, the SEC chairman and the member present were unwilling to speak to the press on the issue.
0 comments:
Post a Comment