Demutualisation Of Dse, Cse
Bourses’ current chiefs to head interim boards
Finance minister AMA Muhith has suggested that the Bangladesh Securities and Exchange Commission should allow current presidents of the Dhaka and Chittagong bourses for the heads of the ‘interim boards’ which will oversee the demutualisation process of the bourses.
Earlier on October 13 the finance ministry had suggested that an independent director would head the bourses’ respective interim boards.
The finance minister gave the fresh suggestion on Tuesday as the bourses opposed the previous suggestion given by the ministry which disallowed the present board presidents of the bourses to continue in the interim boards.
The finance minister said, ‘The present board will continue till the formation of a new board of each bourse and the chairman of the new board will be an independent director.’
The BSEC on Wednesday conveyed the finance minister’s suggestion to the presidents of the Dhaka Stock Exchange and the Chittagong Stock Exchange.
On October 13 the finance ministry advised the stock market regulator to allow the current size (24-member) of the boards of the Dhaka and Chittagong bourses for the interim boards.
The ministry’s suggestion came after the BSEC sought clarification on the issue of the size of the interim boards as the Demutualisation Act 2013 does not have a clear view about the formation of the boards till the first elected boards of the demutualised bourses come into effect.
The BSEC on September 26 approved the demutualisation schemes of the DSE and the CSE, rejecting their proposals over formation of their respective interim boards keeping present board members in the interim boards.
But after the approval of the schemes, the bourses in their respective board meetings decided to adopt all their existing board members as directors of the interim boards in extraordinary general meetings.
The EGMs of the DSE and the CSE will to be held on October 29 and October 25 respectively to pass the memorandum of articles for the demutualised bourses.
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.
‘The finance minister gave fresh suggestion in line with the demutualisation act as the ministry’s suggestion had caused some ambiguities and the bourses brought the matter to the commission’s attention,’ a senior BSEC official told New Age.
-With New Age input
