An Alternative Trading Board (ATB) will be set up by December, 2020 to diversify products in the capital market and increase transactions. Built on a separate platform, the alternative market has the opportunity to trade shares of the over-the-counter (OTC) market, shares of unlisted private companies and public limited companies.
The Securities and Exchange Commission (BSEC) in Bangladesh hopes that this will further increase the government’s revenue from the capital market. As well as being listed in the ATB, the corporate governance of the companies will be strengthened and the way of evading the revenue of the government will be closed. The BSEC has recently sent a letter to the National Board of Revenue (NBR) in this regard.
The letter, signed by BSEC chairman Prof Shibli Rubaiyat-ul-Islam, said it was currently working to develop the bond market to increase product diversity in the capital market. If the capital market improves, the current reliance of banks for financing will decrease and will play a role in the desired industrialization. The BSEC hopes that, as in the past, the capital market will seek the cooperation and support of the National Board of Revenue to increase the country’s revenue collection and contribute significantly to GDP.
Under the ATB platform, all types of securities can be transacted except for the main board of the capital market and a small capital company with a minimum capital of up to Tk 5 crore. In this case, the definition of securities in The Securities and Exchange Ordinance of 1989 will be applicable.
In other words, any type of government securities defined in the Securities Act of 1920, mortgaged assets of the company, transferable shares, debentures, debentures stocks, bonds, investment contracts, derivatives, commodity futures contracts and options contracts can be added to the new platform.
However, it cannot be listed on ATB for the purpose of raising capital. ATB will only ensure the security of the seller’s money as a transaction platform as well as the acquisition of the buyer’s shares. The securities of this platform will be referred to as ATB listed securities
In order to take advantage of transactions under this platform, the issuer concerned has to apply to the stock exchange. For this the issuer can hire a merchant banker. The stock exchange will decide on the acceptance or withdrawal of the application within 30 working days of receipt of the application.
The Commission may suspend the trading of any securities on the ATB platform in the interest of the capital market and investors. Transactions of securities held in ATB will be completed in the approved process of stock exchange through stock dealer or stock broker. The stock exchange will categorize ATB’s trading platforms according to the type of securities. In this case, there will be two classes called auction and negotiation.
The stock exchange will determine all fees, commissions and charges applicable to ATB’s securities. With the approval of the Commission, the Exchange will determine the conditions for submission of report, disclosure and provision of information for ATB Securities. Subject to the prior approval of the Commission, the Exchange will publish the ATB Operational Handbook under the Act, which will be considered a part of the Act.