Formation of co to facilitate stock trading getting delayed
BSEC yet to approve CCBL's memo, articles of assoc
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The formation of a proposed company for facilitating trades in the stock market is taking much time than expected due to delay in getting necessary approval from the Bangladesh Securities and Exchange Commission (BSEC).
The Dhaka and Chittagong stock exchanges in May last announced to form the company, Central Counterparty Bangladesh Limited (CCBL), immediately after completion of the relevant formalities.
But after three months, the exchanges were now saying that they could not yet form the CCBL as the approval on the draft of the memorandum and articles of association of the proposed company is being delayed.
The CCBL is expected to provide clearing and settlement services for trades in securities, options and derivative contracts with a capability of bigger scale risk management.
The Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) agreed on shareholding portions of the proposed company to be held by stakeholders on May 16, 2018.
CSE Managing Director Shaifur Rahman Mazumdar said both the stock exchanges are now doing the relevant works of forming the proposed CCBL.
"The exchanges earlier sent the draft of memorandum and articles of association of the CCBL to the securities regulator. The company will be formed after finalising the draft by the regulator," the CSE managing director said.
He said both the stock exchanges are working to finalise the IT structure required for the CCBL.
"We are taking information from IT vendors. We will provide them quotation after getting complete information on IT structure," Mazumdar said.
Asked, Mohammad Saifur Rahman, an executive director of the securities regulator, said it takes time to finalise any draft rules.
"Finalising any draft rules is not a job of one week. The committee concerned of the securities regulator is working on the draft rules," Rahman said.
After taking necessary regulatory approval, the exchanges will complete the formalities with the Registrar of Joint Stock Companies and Firms (RJSC) to form the CCBL.
As per the exchanges' previous negotiation, the DSE will hold 45 per cent shares of the CCBL while the CSE will hold 20 per cent, banks 15 per cent and CDBL and strategic investors10 per cent each.
The initial paid-up capital of the CCBL will be Tk 3.0 billion.
The DSE earlier published a circular for banks interested to be stakeholders of the CCBL.
Following the circular, 26 banks have already been included as shareholders of the CCBL, the DSE officials said.