Star (August 16, 2011)
The Securities and Exchange Commission has asked the Dhaka and Chittagong stock exchanges to submit a final report on much-talked-about demutualisation of bourses by August.
The regulator also asked them to hold a presentation on the demutualisation for it and the finance ministry.
“We will organise a presentation for the government and the SEC by August on the demutualisation roadmap,” said Fakhor Uddin Ali Ahmed, president of Chittagong Stock Exchange.
The pre-condition of demutualisation is to formulate a parliamentary act with a timeframe to complete the process, said Ahmed, also a vice president of South Asia Federation of Exchange.
“We have already visited some demutualised stockmarkets in Singapore, the Philippines and Australia, and prepared a mixed model on demutualisation.”
Finance Minister AMA Muhith will call a meeting with the bourses and the committee on demutualisation this month, said a top SEC official.
He said the top leaders of the bourses are very keen to demutualise the exchanges as soon as possible.
The demutualisation of exchanges was also a major recommendation of the probe committee on January's stockmarket debacle.
“Before finalising the demutualisation process we need an act on the process, including licence distribution condition, profits and trading system of bourses,” said Ahasanul Islam, senior vice president of DSE.
“We need a better 'value' and 'corporate' method to finalise the demutualisation process,” said Islam.
“We are waiting for the minister's opinions on demutualisation to complete the work,” said a member of the committee on demutualisation.
Any new suggestion of the minister will be accommodated in the process of demutualisation, he added.
Demutualisation of a stock exchange transforms it from an entity owned by mostly brokerage-owning members into a for-profit company owned by shareholders. It ensures a sound corporate governance, alternative business model and operational efficiency.
A demutualised exchange can also trade freely on the market like any other public company.
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