Only 31pc listed firms comply with corporate governance guidelines

Only 31.18 percent companies listed on the bourses fully comply with corporate governance guidelines of the Securities and Exchange Commission (SEC).
But most companies, 56.66 percent, comply with the guidelines partially. However, the companies explained why they could not comply with the guidelines fully.
The rest 12.16 percent companies failed to comply with the guidelines and also did not explain their reasons for failure, according to a SEC report, which was placed at a commission meeting in Dhaka yesterday.
The SEC in early last year introduced the corporate governance guidelines to ensure accountability and transparency of the listed companies. If any company fails to comply with the guidelines, it must explain the reasons for failure. But failure to provide explanations for non-compliance is considered violation of the SEC directives.
The SEC will ask the non-compliant companies to explain for failure to comply with the guidelines.
As per the SEC rules, the penalty for such violation is minimum Tk 1 lakh.
DRAFT MARGIN RULES FOR MERCHANT BANKS OKAYED
The SEC yesterday also approved the draft margin rules for merchant banks.
The margin rules will be published in several newspapers for public opinions or suggestions. After evaluating the opinions or suggestions, the SEC will finally okay the rules and then it will be included in the Merchant Banker (Portfolio Managers) Regulation, 1996.
The SEC is enacting the rules to regulate loans offered by merchant banking wings of banking and non-banking financial institutions to the investors.
Now, there is no guideline on offering margin loans and the merchant banks follow their internal code of conduct to approve loans to investors.
The merchant banking wings of financial organisations, or merchant banks, offer loans, also known as margin loans, to investors to buy securities against shares held by them.
As per the draft rules, the merchant banks will face limitations to offer margin loans to investors. There will be no fixed ratio to sanction margin loans and the SEC will fix the ratio time to time.
The merchant banks will not be able to give loans to their [banks'] board members and their close relatives and employees.
Such banks will have to consider fundamentals of scrip, risk factors and taxation implications while sanctioning loans to investors.
The banks should also inform the investors about their loan interest rate, service charge and any possible future changes on rates and charges before giving loans, according to the draft rules.
While giving loans, the price of share will be calculated on the basis of closing price of a security and the net asset value per share.
The merchant banks can allow loans against shares, debentures, mutual fund certificates (open and close end), and government securities.