Demutualisation Implementation
Confusion over DSE interim board size
Confusion over the size of the ‘interim board’ of Dhaka Stock Exchange during the demutualisation process has been surfaced as the bourse board on Wednesday decided to keep the existing 24 directors in the ‘interim board’ while the market regulators’ said that the size would be 13.
The DSE board on Wednesday in a meeting decided to hold the extraordinary general meeting on October 29 to approve the memorandum of articles for the demutualised bourse and adopt the list of directors of the ‘interim board’.
The board decided that the names of 24 existing directors would be proposed for the ‘interim board’ for approval in the EGM.
The bourse is supposed to apply for registration with the Registrar of Joint Stock Companies for becoming a demutualised stock exchange (a profit-oriented company) within 7 days after the EGM.
Bangladesh Securities and Exchange Commission handed over the demutualization scheme to the bourse on Tuesday.
The bourse will be turned into a company on the day it gets registration from the RJSC and it will have to hold an election for the demutualised stock exchange’s first board, which will be 13-member, within 90 days from the registration date.
After the demutualisation, the bourse’s ownership will be separated from the management.
A senior official of the Securities Exchange Commission, however, told New Age that as per the demutualisation scheme the size of the interim board, which would be adopted in the EGM should be 13-member.
‘The interim board is supposed to complete the demutualisation process. So as per the act, the interim board size will be similar to that the board of demutualised stock exchange,’ he said adding that the interim board would have to be approved in the EGM.
DSE president Ahasanul Islam said that there was no mention about any ‘interim board’ either in the scheme or in the act. ‘As far as we understand, the stock exchange will be demutualised from the date of registration with RJSC and after demutualisation, we have 90-day to form the 13-member board as per scheme,’ he said.
In the existing 24-member board 12 are member-brokers and 12 independent directors whereas 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.
Another senior official of BSEC, however, said that the regulator would take the ultimate decision on the interim board size. ‘The DSE board decision is not the final one. We will take the final decision and if DSE has any confusion, they can come to us,’ he said.
DSE officials said even if the decision to adopt a 13-member interim board is taken, there will be further confusion on how the four member-brokers directors would selected from the existing 12 directors.
-With New Age input
