New trading board approved for non-listed firms

04 Dec 2019 9:55 AM
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The securities regulator on Tuesday decided to allow non-listed firms, bonds and debentures for trading their shares under a new platform called Alternative Trading Board (ATB).

The shares in low-performing listed companies now being traded under the over-the-counter market (OTC) platform would be transferred to the proposed ATB to be traded with shares of non-listed companies, it was also decided.

The over-the-counter market (OTC) launched in 2009 would be abandoned with the introduction of the ATB.

The decisions were taken at a Commission meeting that approved a set of rules in this regard.

The Bangladesh Securities and Exchange Commission (Alternative Trading Board) Rules 2019 would come into effect after completion of other necessary formalities.

BSEC Chairman M Khairul Hossain presided over the meeting at its headquarters in the capital.

Currently, the shares of listed companies are traded at the main boards under the Dhaka and Chittagong stock exchanges—and the OTC market. 

Usually, non-compliant companies are traded at the OTC.

According to the rules, the issuer has to apply to the stock exchange to avail the trading facility of its securities on the proposed ATB. 

The ATB would facilitate entry of new items in the stock market and stimulate trading in non-listed company, bond, debenture, Sukuk, mutual fund and alternative investment fund, a senior BSEC official said.

According to the rules, stock exchanges will determine all fees, commissions, charges, etc. for the purpose of these rules—subject to approval of the commission.

The exchanges will determine reporting, disclosure, information, and other requirements —subject to the approval by the commission.

Stock market insiders said that the introduction of ATB would boost product diversification in the market and enhance investor connection through the stock brokers.

The OTC market has been an unattractive affair in terms of wooing investors since its introduction on October 01, 2009.

Dhaka Stock Exchange (DSE) initiated its OTC facilities with 51 companies on board, the transaction procedure of which are done as per the Securities and Exchange Commission (OTC) Rules-2001. At present, the total number of securities under DSE's OTC facility stands at 64.