B Mirror Report : The securities regulator has issued a fresh directive clarifying who can subscribe to and trade shares on the stock exchanges’ SME platform, setting distinct investment thresholds for individual and institutional investors.
In an order issued on Tuesday, the Bangladesh Securities and Exchange Commission (BSEC) said any individual investor, including resident and non-resident Bangladeshis, must hold a minimum portfolio of Tk1 million in listed securities to be eligible to subscribe to SME primary shares under a Qualified Investors’ Offer (QIO).
Institutional investors and non-individual entities must maintain a higher threshold of Tk3 million to participate in primary SME share subscriptions.
However, the regulator has set a stricter requirement for secondary market trading. To trade SME shares, any investor individual or institutional must maintain a minimum portfolio investment of Tk3 million in listed securities.
Under the new rules, investors who qualify only at the Tk1 million level may subscribe to SME IPOs or QIOs but will not be allowed to trade in the secondary market unless they meet the higher Tk3 million requirement. Such investors may only sell their holdings until their portfolio value increases to the required threshold.
BSEC spokesperson Md Abul Kalam said the directive was issued to remove ambiguity over eligibility requirements for SME platform participation.
He noted that while the main stock exchanges remain open to general investors, the SME platform has stricter entry rules due to the higher risk associated with small-cap companies.
The regulator said the framework is designed to ensure that only financially capable and informed investors participate in SME trading, given the volatility of such securities.
To enforce compliance, the commission has instructed the Central Depository Bangladesh Limited (CDBL) and depository participants to provide automated quarterly updates on investor portfolio data to stock exchanges, which will maintain updated eligibility records.
The directive, which takes immediate effect, replaces the previous order issued on September 21, 2022.
