Dhaka Stock Exchange has put forward a set of proposals, including removal of confusions, to the securities regulator in an effort to save the market from the brink of collapse.
DSE proposals include proper categorisation of newly listed companies and re-fixation of charge of the Central Depository Bangladesh Limited (CDBL).
The proposals were placed at a meeting with the Bangladesh Securities and Exchange Commission (BSEC) at its office yesterday.
BSEC chairman M Khairul Hossain, DSE chairman Justice Siddiqur Rahman Miah and other high officials were present.
After the meeting DSE managing director Swapan Kumar Bala told journalists that the banks failed to inject funds into the capital market because of regulatory limitations as their subsidiaries’ investment in the capital are included in the banks’ exposure. “This is an overlapping of regulations.”
Bala said as per the law, the banks' exposure will have to be reduced to 25% of their capital by 2016.
“We urged the stocks regulator to make the bank’s exposure clear after consulting with the central bank,” he said.
DSE also proposed removal of difficulties regarding the pay-out settlement maintained by the CDBL.
“For example, settlements of traded securities purchased on Monday are supposed to be matured just before the Tuesday’s trading session in line with the T+2 trading cycle,” DSE said.
“These shares were showed as short selling in the BSEC’s surveillance software if such shares are sold before 12pm on Tuesday as the CDBL failed to transfer shares into the respective BO accounts in time.”
Proper categorisation of the newly listed companies taking their performance into account was also one of the recommendations of the DSE. Presently, a new company’s shares trading begin under “N” category.
DSE also demanded withdrawal of the section 53 (O) of the Income Tax Ordinance, 1984 considering manpower shortage and some other problems.
According to the ordinance, the custodian banks, merchant banks, financial institutions or Trading Right Entitlement Certificate-holder companies are to deduct the gains tax.
In response to the DSE’s proposals, BSEC chairman assured the DSE of sitting with the authorities concerned to fix the problems faced by the stock market now.
About the pay-out settlement issue, he told the meeting that the problems with the CDBL might be solved in next few days.
In the meeting, the DSE also discussed about the current situation of the market which continued to decline for a long time.
The benchmark index, DSEX, yesterday closed near 4000-mark psychological level after 18 months, as investors continued to release their holdings taking cue from the confrontational politics.
In last seven months, DSE lost more than 1300 points.
