Demutualisation Of Dse, Cse
Fin min allows current bourse directors to remain in interim board
The finance ministry has advised the stock market regulator to allow the current size (24-member) of the boards of the Dhaka and Chittagong bourses for ‘interim boards’ which will oversee the demutualisation process of the bourses. The ministry’s suggestion cleared the confusion over the size of the boards. After the BSEC sought clarification on the issue, the ministry on October 13 informed the Bangladesh Securities and Exchange Commission that the interim board size of the bourses would remain the same as the existing boards.
The BSEC raised the issue as the Dhaka Stock Exchange at a recent board meeting decided to adopt all existing board members as directors of the ‘interim board’ which will hold the extraordinary general meeting on October 29 to approve the memorandum of articles for demutualised bourse.
The interim board is suppose to hold an election for the demutualised stock exchange’s first board, which will be of 13-member, within 90 days from the date of its registration with the Registrar of Joint Stock Companies and Firms.
After the registration with the RJSC the bourses will be demutualised and the bourse’s ownership will be separated from the management.
Confusion surfaced over the interim board size after the BSEC suggested that the number of members of the interim board should be 13 considering the standards of the demutualistion law while the DSE said the law did not specify any size for the interim board.
In the existing 24-member board, 12 are member-brokers and 12 independent directors. In the 13-member board of demutualised exchange, there will be four posts for member-brokers, seven independent directors, one for strategic partner and chief executive officer of the bourse.
‘We sought clarification from the finance ministry on the issue and the ministry confirmed that the size of the interim board would be as per DSE’s line,’ a senior BSEC official told New Age.
He said that the heads of the respective interim boards of the bourses, however, would be independent directors.
The official said the DSE and the Chittagong Stock Exchange were informed about the ministry’s decision on the matter.
The CSE is set to hold an EGM on October 25.
DSE president Ahsanul Islam said the priority of the bourse was to complete the formalities for the RJSC registration.
‘After the registration we will declare the date of the election which will likely to be held late November or early December,’ he said.
The government initiated the move of demutualising the stock exchanges after the market crash in 2010-11.
A government probe committee recommended that the bourses should be demutualised in order to ensure better corporate practice and do away the cartel-like behaviours of the some influential members of the bourses.
-With New Age input
