The Securities and Exchange Commission (SEC) is now considering introduction of mandatory credit rating for companies seeking funds from the market.

The market regulators think such a rating would help them as well as shareholders judge the actual merit and strength of a company.

The SEC may introduce the rating as many of the companies raised funds from the market but failed to pay desired return to the shareholders.

The regulators are also considering introduction of different slabs to ensure that small investors are not deprived of shares of new companies.

To this end, an eight-member standing committee of SEC started reviewing the existing rules and regulations in its first meeting on Wednesday.

As per the existing rule, mandatory credit rating is applicable only in case of going for rights issues and bonus shares.

"Credit rating should be mandatory for all public issues besides rights issues and bonus issues," a senior SEC official said.

He said the rating will also increase market depth and prevent weak issues from entering market which are usually used as tools for manipulating share prices.

"The ratings will help investors assess the actual strength of the company prior to deciding to subscribe it. Besides, the SEC would also be in a position to assess the merit of the company and decide it," he added.

Presently, CRISL is the sole credit rating company operating in Bangladesh. But sources said applications of few more companies are pending with the SEC.

Another member of the SEC standing committee said the Commission is considering introducing slabs in subscription of initial public offering (IPO) to ensure shares go to the hands of small investors.

The committee in Wednesday's meeting also discussed the netting system in share trading. Regarding re-introduction of the system Dhaka and Chittagong stock exchanges differ in their opinions.