The Securities and Exchange Commission on Wednesday approved the draft demutualisation act which will separate the management form the ownership of the bourses to do away with the conflict of interests.
The approval came at a meeting on Wednesday presided over by the SEC chairman M Khairul Hossain at the commission’s board room.
The SEC will send the draft act to the finance ministry which will place it in parliament for approval.
The stock exchanges will have to submit their demutualisation schemes to the SEC within 90 days of the passage of the act which the commission will approve within next 60 days.
After the demutualisation, majority if the directors of the bourses will be form the independent directors’ category and the bourses will be allowed to raise capital from the stock market by floating shares for public.
The bourses will also be allowed to sell shares to institutional investors to enlist strategic partners.
According to the demutualisation scheme of the Dhaka Stock Exchange, the existing members or brokerage houses will hold 50 per cent of the shares after demutualisation of the bourse.
The remaining 50 per cent of the DSE shares will be divided into equal amounts for the strategic shareholders and the public, it said.
The Chittagong Stock Exchange in its demutualisation scheme said that it would reduce the ownership of the bourse by floating shares up to 70 per cent to the public and institutional investors in three phases.
At present, member brokerage houses of the DSE and the CSE are owners and their elected representatives are members of the board of directors of the two bourses.
A probe committee that investigated the stock market crash of 2010-11 strongly recommended demutualisation of the bourses to avoid conflict of interest.
-With New Age input
The post SEC approves draft demutualisation act appeared first on Dhaka Mirror.
]]>