The commission also proposed that a company except the IPO and listed companies does not require to get the consent from the regulator regarding raising capital through the equity shares
The securities regulator BSEC approved drafted proposals regarding amendment to a number of rules tightening capital raising process through initial public offerings (IPO) and raised quota facility for the general investors by 10%.
The commission also proposed that a company except the IPO and listed companies does not require to get the consent from the regulator regarding raising capital through the equity shares. A directive would be issued soon.
The approval was given at a commission meeting presided over by Bangladesh Securities and Exchange Commission (BSEC) Chairman M Khairul Hossain, held at its headquarters, on Wednesday.
The IPO quota facility for the general investors were raised to 50% from existing 40% under the fixed price method and it would be increased to 40% from 30% under the book building method.
The quota facility of illegible investors will be cut to 50% from 60% under the book building method while it was reduced to 30% from the current 40% under the fixed price method.
The commission proposed that the eligible investors must invest a certain amount of funds in the capital market fixed by the commission to get the IPO quota facility.
The shares of the shareholders mentioned in the IPO prospectus must be locked-in for the three years and would be calculated from the first trading day of the issue. The existing one-year lock-in.
It said that a company cannot apply for public issue without using previous issued capital completely.
The size of the public issue under the fixed price method must be minimum Tk 50 crores or 10% of the company’s paid up capital whichever is higher.
The size of the public issue under the book building method must be at least Tk 100 crore or 10% of the company’s paid up capital whichever is higher.
The issue under the book building method would be canceled if the shares under the EI quota will not be sold completely, said the proposed amendment.
The name and price quotation of any bidder in book building cannot be displayed. The bidder must buy the amount of shares at the prices he/she quoted for.
Recently a meeting of the BSEC with different stakeholders, including merchant banks and Dhaka Stock Exchange took a number of critical decisions to revive the ailing stock market.
The BSEC decided that no prior permission would be required from the BSEC for issuing shares under private placement, Saifur Rahman, executive director and spokesperson of the BSEC have said, referring to the meeting decision.
The regulator also decided to launch price bidding in line with the Dutch auction method where bidders acquire shares according to their own bidding price.