The Securities and Exchange Commission has suspended share trading on the country’s twin bourses on Sunday.
This move was taken by the regulator for the first time in the country as stocks have been crashing day after day, precipitating violent demonstrations for some weeks now. SEC also suspended share trading rights of six brokerage firms for one month on charge of aggressive share sale, which the regulator felt was the behind Thursday’s market fall.
The Chief executive officers of these firms have also been directed to stay away from the market for one month with immediate effect.
The brokerage firms are IIDFC Securities Limited, PFI Securities Limited, Alliance Securities Limited, NCC Bank, Al Arafah Islami Bank and Dhaka Bank.
“Trading at the bourses will remained closed on Sunday,” said Yeasin Ali, a member of SEC, said.
“Resumption of trading will be decided after a commission meeting scheduled for Sunday,” he added.
On suspension of brokerage firms trading, he said, “ We noticed that these frims went for aggressive selling on Thursday, which is one of the reason for the market’s fall”.
Clients of those brokerage firms will be allowed to trade through their link accounts.
A hearing letter was sent to those firms for explanation,
he said.
A hearing usually takes place before stoppage of trade of a brokerage house.
The securities regulator also banned book building method introduced in 2009 untill further order as the pricing determined by the issuers and institutional investors had drawn sharp criticism from the different corners recently.
Three companies—Khulna Power Company Limited, Ocean Containers Limited and RAK Ceramic— had hit in the market last year under the book building method.
The companies which have already conducted successful bidding under Book Building Method shall be excluded from this notification. This Notification shall have immediate effect.The book building method was introduced in March last year, aiming to encourage private-sector entrepreneurs to list their companies on the bourses at fair prices.
Using this book building method, institutions bid for shares through which the price is discovered.
