FE Report
The securities regulator has approved its proposed draft rules on the issuance of debt securities through private placement aiming to help the issuers raise funds for accelerating their activities, officials said.
The Securities and Exchange Commission (SEC) has also sought public opinion and after evaluating public opinion the draft rules will be finalised by the regulator.
The short title of the rules set to issue debt securities will be "Securities and Exchange Commission (Private Placement of Debt Securities) Rules, 2012".
For issuing debt securities, an issuer will have to own a good track record of profitability and liquidity or its forecast financial position so that the issuer can pay-back the debts within specific timeframe.
As per the definition set by the SEC, the "debt securities or debt instruments" means securities those evidence the indebtedness of the issuer to the investors in the form of bond, debt, or any other instrument of indebtedness, whether secured or not.
The securities regulator has fixed ten conditions applicable for an issuer, an entity that intends to raise or has raised long term finance by issuing debt securities, to be fulfilled prior to make an application for issuance of debt securities.
As per the condition, the total debt of the issuer, including the proposed issue, cannot exceed 80 per cent of its total tangible assets.
However, the debt-equity or capital adequacy ratio of an issuer may is determined by primary regulator and the commission may consider variation of the ratio.
The issue also needs to be rated by a credit rating company, and the issuer should have a valid enforceable interest over its assets and the right to create charges thereon in course of issuance of the debt instruments.
And the financial statements of the issuer will have to be prepared as per Bangladesh Accounting Standards (BAS) as applicable in Bangladesh, and audited as per Bangladesh Standards of Auditing (BSA).
The board approval to the issue is a must and in case the issuer is a listed company the shareholders' consent will also have to be taken in a general meeting.
Among other conditions, the issuer will have to appoint a trustee for the issue. The applicant will have to pay ten thousand taka as application fee, along with the application.
And if the commission decides to accord the consent to the issue, the applicant shall pay, within fifteen days of issuance of the letter of intent, a fee at the rate of 0.10 per cent on the total face value of securities to be issued.
The securities regulator has approved its proposed draft rules on the issuance of debt securities through private placement aiming to help the issuers raise funds for accelerating their activities, officials said.
The Securities and Exchange Commission (SEC) has also sought public opinion and after evaluating public opinion the draft rules will be finalised by the regulator.
The short title of the rules set to issue debt securities will be "Securities and Exchange Commission (Private Placement of Debt Securities) Rules, 2012".
For issuing debt securities, an issuer will have to own a good track record of profitability and liquidity or its forecast financial position so that the issuer can pay-back the debts within specific timeframe.
As per the definition set by the SEC, the "debt securities or debt instruments" means securities those evidence the indebtedness of the issuer to the investors in the form of bond, debt, or any other instrument of indebtedness, whether secured or not.
The securities regulator has fixed ten conditions applicable for an issuer, an entity that intends to raise or has raised long term finance by issuing debt securities, to be fulfilled prior to make an application for issuance of debt securities.
As per the condition, the total debt of the issuer, including the proposed issue, cannot exceed 80 per cent of its total tangible assets.
However, the debt-equity or capital adequacy ratio of an issuer may is determined by primary regulator and the commission may consider variation of the ratio.
The issue also needs to be rated by a credit rating company, and the issuer should have a valid enforceable interest over its assets and the right to create charges thereon in course of issuance of the debt instruments.
And the financial statements of the issuer will have to be prepared as per Bangladesh Accounting Standards (BAS) as applicable in Bangladesh, and audited as per Bangladesh Standards of Auditing (BSA).
The board approval to the issue is a must and in case the issuer is a listed company the shareholders' consent will also have to be taken in a general meeting.
Among other conditions, the issuer will have to appoint a trustee for the issue. The applicant will have to pay ten thousand taka as application fee, along with the application.
And if the commission decides to accord the consent to the issue, the applicant shall pay, within fifteen days of issuance of the letter of intent, a fee at the rate of 0.10 per cent on the total face value of securities to be issued.
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