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Both the stock exchanges have been given the authority to transfer any listed security to 'Z' category without permission from the securities regulator.
To this effect, the Bangladesh Securities and Exchange Commission (BSEC) on Monday issued a directive.
Previously, the bourses could move a stock to 'Z' category if the company failed to declare any dividends. Since September 2020, the exchanges needed regulatory permission for that.
As per the existing provision, a stock is transferred to 'Z' category if the company has failed to pay any dividend for two consecutive years from the date of declaration of the last dividend.
A company gets 30 days before distributing its declared dividends and has to submit a report on dividend disbursement within the next seven days.
On receipt of the report, the exchange changes the company's category, if required. It does not matter whether the company distributed the whole or any substantial portion of the declared dividends.
From now on, a company will be shifted to 'Z' category if it has distributed less than 80 per cent of the declared dividends within the stipulated time.
In its Monday's directive, the securities regulator has also included a provision according to which the listing category will be changed based on interim dividends.
In that case, the company is required to get a review of its interim financial statements by a statutory auditor.
But the category adjustment will not be considered unless at least 80 per cent of the declared dividends have been paid off within the given time frame.