BSEC to bid adieu to OTC market
The BSEC will shift some of the companies from the OTC market to the SME platform and some others to the Alternative Trading Board (ATB) of the stock exchanges
The Bangladesh Securities and Exchange Commission (BSEC) is taking preparations to abolish the "Over the Counter (OTC) market" of the country's stock exchanges.
The commission is developing a working plan which will be finalised within a short time, said sources at the BSEC.
The BSEC will shift some of the companies from the OTC market to the SME platform and some others to the Alternative Trading Board (ATB) of the stock exchanges to make them more dynamic, said a senior BSEC official.
Only general investors will be able to sell shares of the firms shifted to the SME platform. Other directions regarding the move could not be confirmed.
The commission will provide exemption-related rules regarding the shifting the companies later.
The OTC market is a facility provided by a stock exchange for buying or selling securities delisted from the exchange.
Sources said 10 companies will be shifted from the OTC platform to the SME platform of the Dhaka Stock Exchange (DSE). The companies are required to apply to the stock exchange following section 11 of the Dhaka Stock Exchange Regulations 2019.
Thirty-two companies, a few of which are in operation, will be shifted to Alternative Trading Board (ATB) of the DSE. The general investors' shares in these companies are higher than that of the sponsors and directors of those companies
Besides, 18 companies trading shares over the counter have been planning to exit the OTC Market. Five of these companies have already applied to the related regulator for approval of their exit plans.
The commission has also shifted four companies from the OTC market to the main board of the stock exchange as they performed better.
The rest of the companies may perform better if their management tries heart and soul to return to profit and follow the rules and regulations. That is why, the commission wants to support them to come out of the difficult situation, said the senior BSEC official.
Earlier, the stock exchanges conducted special audits of financial statements of 21 companies in the OTC market.
The exchanges physically visited 43 companies in the OTC market that are not in operation.
The exchanges investigated all financial and non-financial information of those companies.
They checked the existence of land, buildings, and property to assess their value.
The DSE launched its OTC in October 2009 with 51 companies.
The companies were ousted from the main board to the OTC because of their underperformance or non-performance in business, failure to hold shareholders' annual general meeting over the years, and for converting their own shares into electronic ones instead of paper certificates.
In the second phase, 29 more companies were sent to the OTC.