Muhith asks bourses to prepare detailed demutualisation plan

Finance Minister AMA Muhith yesterday asked the bourses to come up with a detailed plan on demutualisation of stock exchanges by December.
Muhith made the call at a meeting on demutualisation where officials of Dhaka and Chittagong stock exchanges gave two separate presentations on the system.
Demutualisation of a stock exchange transforms it from a mutually owned entity into a for-profit company owned by shareholders through switching its existing legal structure into a business corporation. It ensures a sound corporate governance, alternative business models and operational efficiency.
The minister asked for a 'detailed concept paper', said an official who was present at the meeting. If necessary, the exchanges can appoint consultants for the job, he said.
Apart from the officials of the bourses, commissioners of the Securities and Securities Commission, governor and other senior officials of the central bank, two former SEC chairmen and president of the Bangladesh Insurance Association were present at the meeting.
The premier bourse in its presentation said it can complete the demutualisation process by 2012, while the port city bourse said it can finish the job in 40 weeks.
Bangladesh's stock exchanges are now non-profit cooperative organisations, owned by the exchange members who are usually stockbrokers. The Dhaka Stock Exchange was incorporated in 1954 and trading on the bourse started in 1956, while the Chittagong Stock Exchange was established in 1995.
The bourses' responsibilities include listing of companies, providing screen-based automated trading of listed securities and trade settlement.