In a major boost for small-cap firms, capital market regulator BSEC yesterday decided to formulate regulations for them to list and raise funds through a dedicated trading platform.
Under the proposed norms to be finalised after taking people’s opinion, stock exchanges would have a separate trading platform where only institutional investors will be allowed to trade, said Bangladesh Securities and Exchange Commission (BSEC) in a statement yesterday.
Besides, rules for raising fund through IPO, listing and disclosure requirements of these small firms will be relaxed compared to the existing IPO system.
Paid up capital required for public offering by a company will be Tk5 crore and the company’s post-listing minimum paid-up capital will be minimum Tk10 crore and highest Tk30 crore, according to the proposed norms.
Direct listing will not be allowed for these companies and shares of existing shareholders will be locked in for a certain period.
Only qualified investors like institutional investors (but not retailers) can participate in share trading on the new trading platform. Trading will be executed by the stock brokers.
On amending the market maker rules, the BSEC hoped that a panel entrusted for amending market maker rules would submit its report soon.
The regulator moved for amending the market maker rules following the stakeholders’ non-response to the rules even after its formulation 14 years ago.
A market maker is a company, or an individual, that quotes both a buy and a sell-off price in a financial instrument or commodity held in an inventory, hoping to make a profit on the bid-offer spread, or turn.
The BSEC also penalised managing directors and every directors of Amam Sea Food Industries and Dhaka Fisharies Tk 2 lakh each for failing to submit their audited reports in due time.