Regulator eases listing rules for foreign firms

Joint venture and foreign companies with a paid-up capital of Tk 50 crore and above will not need to be listed with bourses, as Bangladesh Securities and Exchange Commission has recently scrapped a provision on the mandatory listing of such firms.

As per a notification issued in May 2010, private limited companies, including foreign and joint ventures, needed to turn into public limited firms within six months of exceeding their paid-up capital of Tk 40 crore.

Once the paid-up capital of a company exceeded Tk 50 crore, the company was bound to apply to the capital market regulator within a year to float shares in the stock exchanges.

With the new move, only the local companies will now have to be listed on the bourses after their paid-up capital exceeds Tk 50 crore, said an official of the stockmarket regulator.

The waiver came after different chambers requested the commission to scrap the provision, as it was barring many foreign companies from making additional investments in Bangladesh.

Some multinational companies seek an exemption every year from being listed as their paid-up capital has crossed Tk 50 crore. The commission was giving time extensions to these companies every year as well.

At present, some 15 multinational companies are listed and they account for less than 1 percent of the total market capitalisation.

Capital market investors show interest in the multinational companies as the firms perform relatively better and pay higher dividends.