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SEC amends Direct Listing Regulation 2006


The Securities and Exchange Commission (SEC) Tuesday amended the Direct Listing Regulation 2006 for encouraging companies interested to go public without raising capital further, reports BDNEWS.
The SEC made the amendment considering the recommendations of the Dhaka Stock Exchange (DSE), which demanded revision of some of the provisions of the regulation. The commission approved the regulation last month.
According to the revised rule, the concerned company interested in being listed directly with the exchanges will have a minimum Tk 100 million worth paid-up capital. The duration of commercial operation of the company will need to be at least for five years.
The interested company must operate at profits for three years out of five years, the revised regulation stated.
The Regulation previously allowed companies to be listed directly with a paid-up capital worth Tk 50 million. The requirement for commercial operation was three years.
"This amendment has been made considering the recommendations of the DSE," Mansur Alam, executive director of SEC, said.
The revised rules also specified the requirement of credit rating for the companies interested in being listed directly. "The minimum credit rating requirement is BBB," he said.
Mansur Alam said the SEC will notify both the stock exchanges shortly on the issue and it will be effective following the publication of the gazette by the exchanges.
When asked he said the SEC framed the regulations considering the demands from the stakeholders. "This will help bring better performing companies in the market," he said.
He said many of the companies are reluctant to go public through initial public offerings (IPOs). "Now they will be able to be listed directly with the exchanges without IPOs," he said.