Bangladesh Securities and Exchange Commission has modified circuit breaker system on the newly listed companies with immediate effect.
From now on the circuit breaker system will be applied on the newly listed companies from second day of trading instead of earlier fifth day.
The circuit breaker system in the stock exchanges controls the prices of individual shares from going up or down by a certain limit.
Recently, the newly listed companies like Shahjibazar Power Company and United Power Generation Company, saw abnormal price hike in their first trading days, which has prompted the regulator to take the decision.
“Newly listed companies were traded without circuit breaker for five days. But from now on, this circuit breaker will be effective from the second day of trading,” said the BSEC in a statement yesterday.
Earlier on April 30, Dhaka Stock Exchange, the premier bourse of the country, urged the BSEC to impose a circuit breaker on new stocks to check unusual increase in share prices of the newly listed companies.
A press release issued after a meeting at BSEC chaired by its Chairman Khairul Hossain ensured the new regulation.
As per the decision, newly listed companies of DSE will be allowed to trade without circuit breaker for the first two days.
Up till now, there was no circuit breaker for 5 days for the trading of newly listed companies of DSE.