The Dhaka Stock Exchange (DSE) has formed five separate committees to speed up implementation of demutualisation scheme.
The committees are Nomination Remuneration and Human Resource Committee, Regulatory Affairs Committee, Audit and Risk Management Committee, Appeal Committee and Conflict Mitigation Committee. The DSE at its board meeting last week formed the committees.
Four committees have five members each three from independent directors, one from stakeholders and DSE chief executive officer. Regulatory Affairs Committee, however, comprised of three members – all from independent directors.
The three independent directors are the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) President Kazi Akram Uddin Ahmed, Bangladesh Insurance Association Chairman Sheikh Kabir Hossain and additional secretary of commerce ministry Ruhul Amin Sarker.
As stakeholders, Abdul Haque will be in Nomination Remuneration and Human Resource Committee, DSE directors Minhaz Mannan in Audit and Risk Management Committee, Hanif Bhuaiyan in Appeal Committee and Ahmad Rashid in Conflict Mitigation Committee.
In line with the demutualisation scheme to form new board of directors of the prime bourse, Nomination Remuneration and Human Resource Committee, headed by the FBCCI president, will propose names of independent directors to the securities regulator for approval.
Ahmad Rashid said the committees were formed in accordance with the demutualisation scheme. “It’s a part of demutualisation scheme.”
On November 22, the Dhaka and Chittagong stock exchanges have turned into demutualised exchanges after they received certificates from the Registrar of the Joint Stock Companies and Firms (RJSC).
Demutualisation, a way of separating the bourses’ management from ownership, is expected to bring transparency and accountability to the market. It will transform the two bourses from their current non-profit and cooperative state into profit-oriented entities.
As per the Demutualisation Act - 2013, the bourses have to hold election within 90 days of getting certificates from the RJSC to elect 13 member boards.
Of the 13-member board with three-year term, seven directors will be independent, four from shareholders and one from strategic shareholder. In addition, the chief executive officer of a stock exchange will act as an ex-officio director having voting rights.
The post of strategic shareholder directors will remain vacant as long as eligible strategic shareholder is not found. Under a “Fit and Proper Test” criteria mentioned in the demutualisation plan, independent director will be selected from the board of directors of the bourses.
According to the Act, stock exchange members or brokerage houses will hold 40% after the demutualisation of a bourse. The rest 60% will be kept for trading right entitlement certificate holders, strategic investors and individuals.
Strategic investors will not be allowed to hold more than 25% stake of a stock exchange, while no individual will hold more than 5%.
