All applicants will get initial public offering (IPO) shares if they have a minimum investment in the secondary market of the stock market. In addition, the evaluation committee has taken a policy decision to update the Electronics Subscription System (ESS), abolish the lot system, fix the application fee and reduce the transaction time of the new company.
These issues were discussed at the first meeting of the committee on allotment of IPO shares at the Securities Commission building in Agargaon last Sunday. The meeting was chaired by Mansur Rahman, director of the Bangladesh Securities and Exchange Commission (BSEC) and chairman of the committee.
Three representatives of DSE, three representatives of CSE and two representatives of CDBL were present at the time. BSEC director and chairman of the committee confirmed to reporters at the end of the meeting.
According to meeting sources, If any BO account holder have a minimum investment of Tk 20,000 in the secondary market in the stock market, he can apply for an IPO. The committee will propose the matter to the commission. However, the amount of money will be finalized by the commission. In addition, the lottery system will be abolished and investors will be allotted shares in the BO in an automated system.
Meanwhile, the committee is considering updating the ESS first to allocate shares to all the investors who have applied. In that case the information has to be updated as per the prescribed application fee instead of the lot system of shares in brokerage houses and CDBL.
In addition to CDBL and brokerage houses, merchant bank information will also be updated in the ESS system. The commission will finalize it. In addition, the lottery system will be abolished and investors will be allotted shares in the BO in an automated system.
Meanwhile, the committee is considering updating the ESS first to allocate shares to all the investors who have applied. In that case the information has to be updated as per the prescribed application fee instead of the lot lot system of shares in brokerage houses and CDBL.
In addition to CDBL and brokerage houses, merchant bank information will also be updated in the ESS system. The commission will finalize it. In addition, the lottery system will be abolished and investors will be allotted shares in the BO in an automated system. Meanwhile, the committee is considering updating the ESS first to allocate shares to all the investors who have applied. In that case the information has to be updated as per the prescribed application fee instead of the lot lot system of shares in brokerage houses and CDBL. In addition to CDBL and brokerage houses, merchant bank information will also be updated in the ESS system.
Sources further said that in case of IPO application, a certain amount of fee will be fixed by canceling the lot lot system of shares. The rest of the money will be returned to the BO account by allocating shares as per the total applicant. For example, a company released 1 crore shares in the market, applied for 3 million. In this case 1 crore shares will be distributed equally among 3 million investors. In this case an investor will get the allotted shares. According to the shares, the broker house or the merchant bank will deduct a certain amount of money and return the rest to the investors.
The committee will propose to reduce the time from the start of the subscription to the start of the transaction. Currently, it takes 45 days for the transaction to start from the start of the subscription. It will be proposed to reduce this time to 30 days.
