Bangladesh Securities and Exchange Commission (BSEC) is planning to make application process for initial public offering shares easier and free of hassles for retail investors.
The regulator made a presentation on the new plan before stakeholders at its office in Dhaka yesterday.
Sources said the plan will be finalised on the basis of opinions of stakeholders.
BSEC said the retail investors, if the plan implemented, can apply for IPO shares allotment through their respective brokerage firms and merchant banks and deposit money to their beneficiary owner’s (BO) accounts.
Under the new plan, the money will be transferred from BO accounts of successful investors in the IPO lottery to the issuing companies.
It is expected the change will reduce hassles of cheque handling and processing time currently associated with manual applications.
As per the present procedures, investors need to submit money with their applications for IPO shares to their bank accounts where hours wasted standing in queues.
But the new application process will help reduce the troubles faced by the investors while applying for IPO shares, said the stocks regulator.
A BSEC official said the proposed process will eliminate expenses and unnecessary times which the issuers require in refunding warrant money of unsuccessful investors in the IPO lottery.
Representatives from Dhaka Stock Exchange and Chittagong Stock Exchange (CSE) and other stakeholders were present during the presentation.
The BSEC official said once the new process is done, it might help ease liquidity shortage in the secondary market.
Huge amounts of money remain stranded from the date of application to refunding of warrant under the existing system, he said.
Syed Sajid Husain, CSE’s chief executive officer, said: “BSEC made a presentation about its proposal on IPO share application process and sought our opinions before finalisation.”
“The stakeholders will send their opinions within a week after examining every pros and cons of the proposal,” he said.
He said the regulator intended to initiate a slew of measures to make application for IPO shares for retail investors easier and less expensive for companies.