Regulator warns DSE on breach of rules
The Dhaka Stock Exchange has failed to properly comply with the demutuali-sation scheme and rules, the stockmarket regulator has said.
Demutualisation was meant to establish good governance, protect investors' interest and separate the bourse's management from ownership.
But some deviations by the bourse's board and management were observed recently.
“These are not expected,” Bangladesh Securities and Exchange Commission or BSEC said in a letter to the DSE yesterday.
The regulator also directed the DSE board and management to properly comply with the law.
The issue of non-compliance came to light after the DSE terminated one of its general managers without citing any reason in December last year.
Prior to terminating the general manager's appointment, the DSE did not put the issue on agenda at any board meeting. The DSE board had taken the decision without following rules. Earlier last month, the BSEC also temporarily suspended the chief regulatory officer of the Chittagong Stock Exchange and warned the bourse's chairman not to violate the demutualisation law again in future.
The regulatory move came following a probe report on the conflict between the port city bourse's management and the board of directors.
The demutualisation scheme was approved by Bangladesh Securities and Exchange Commission in 2013. In 2012, a law on demutualisation was passed in parliament with a promise to bring transparency to the stockmarket.
The demutualisation is a way of separating management of the bourses from ownership. It transforms a stock exchange into a profit-oriented company, owned by shareholders and ensures alternative business models and operational efficiency.
Prior to demutualisation, Bangladesh's stock exchanges were non-profit cooperative organisations, owned by the exchange members who are usually stockbrokers.