FE Report
The securities regulator has moved to reduce the timeframe of completing IPO (initial public offering) process of a company to lessen general investors' hassle, officials said.
Policymakers of the Bangladesh Securities and Exchange Commission (BSEC) said the move has been taken as part of regulatory reforms in the securities rules.
"Our aim is to ensure maximum benefit for the general investors by paving the way of refunding the money of unsuccessful IPO applicants within the shortest possible time," Arif Khan, a BSEC commissioner, told the FE.
Under the existing system, a company has to print and submit its IPO prospectus to the securities regulator and the bourses within seven days of approving the IPO proposal. Within this period the company is also required to apply for listing with the bourses.
The time period of completing the public subscription is stated in the consent letter that allows a company to go public.
After completion of public subscription the company is required to complete lottery for share allotment, distribution of refund warrants, and listing with the bourses within next 75 days.
As a result, more than four months are required to complete the IPO process of a company.
The BSEC commissioner said the regulator is preparing a draft for revising the IPO rules by conducting a study on IPO process, followed in the developed countries.
"Formulation of the draft will be completed by September next, then the regulator will seek public opinion on the proposed reforms in the IPO process."
He said general investors, involved with the IPO process, will be benefited after completion of the move.
"Our objective is either to reduce the timeframe of the IPO process or to introduce a system so that the IPO applicants' money does not remain blocked. In that case they may be allowed to deposit fund only after being successful in the lottery," Mr Khan added.
The unsuccessful investors face hassles in getting back their money in absence of online banking.
He said cooperation among all the stakeholders, involved with the IPO process, is very important to make the move successful
The securities regulator has moved to reduce the timeframe of completing IPO (initial public offering) process of a company to lessen general investors' hassle, officials said.
Policymakers of the Bangladesh Securities and Exchange Commission (BSEC) said the move has been taken as part of regulatory reforms in the securities rules.
"Our aim is to ensure maximum benefit for the general investors by paving the way of refunding the money of unsuccessful IPO applicants within the shortest possible time," Arif Khan, a BSEC commissioner, told the FE.
Under the existing system, a company has to print and submit its IPO prospectus to the securities regulator and the bourses within seven days of approving the IPO proposal. Within this period the company is also required to apply for listing with the bourses.
The time period of completing the public subscription is stated in the consent letter that allows a company to go public.
After completion of public subscription the company is required to complete lottery for share allotment, distribution of refund warrants, and listing with the bourses within next 75 days.
As a result, more than four months are required to complete the IPO process of a company.
The BSEC commissioner said the regulator is preparing a draft for revising the IPO rules by conducting a study on IPO process, followed in the developed countries.
"Formulation of the draft will be completed by September next, then the regulator will seek public opinion on the proposed reforms in the IPO process."
He said general investors, involved with the IPO process, will be benefited after completion of the move.
"Our objective is either to reduce the timeframe of the IPO process or to introduce a system so that the IPO applicants' money does not remain blocked. In that case they may be allowed to deposit fund only after being successful in the lottery," Mr Khan added.
The unsuccessful investors face hassles in getting back their money in absence of online banking.
He said cooperation among all the stakeholders, involved with the IPO process, is very important to make the move successful
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