Summary:  

The Bangladesh Securities and Exchange Commission (BSEC) is evolving a working plan to abolish the Over-the-Counter (OTC) market to facilitate trading for the castoffs companies. The plan will be finalized within a short time which will shift some of the companies to the SME platform and some others to the Alternative Trading Board (ATB) of the stock exchanges.

Content: 

Over-the-counter or off-exchange trading is done directly between two parties, without the supervision of an exchange. It is contrasted with exchange trading, which occurs via exchanges. A stock exchange has the benefit of facilitating liquidity, providing transparency, and maintaining the current market price. As there is no corporate governance, investors might suffer from the OTC market.

BSEC spokesperson Mohammad Rezaul Karim said, “All the companies in the OTC market are under surveillance. All their activities are being monitored. ”There are many problems in the companies such as mismanagement and irregularities traded on the OTC market.”

Sources said, 10 companies will be shifted from the OTC platform to the SME platform of the Dhaka Stock Exchange. To shift, the companies are required to apply to the stock exchange by sec 11 of the Dhaka Stock Exchange Regulation 2019.

However, only general Investors will be able to sell shares of the firms shifted to the SME platform. Further direction has not been confirmed yet. The commission will provide several exemption-related rules for the companies to shift to the SME platform.

The other slowly operating companies and nonperforming companies will be shifted to the Alternative Trading Board (ATB) of the DSE.  “Alternative Trading Board” or “ATB” means the facilities provided by an exchange for the purpose of buying and selling of securities under these Rules; … XVII of 1969), the Bangladesh Securities and Exchange Commission Act 1993 and the Depository Act 1999. The number of ATB shifting companies is thirty-two.

The companies who are performing bad can also exit the OTC market.  There are eighteen companies who are planning to exit the OTC market among which five have already applied to the related regulator for approval of their exit plan.

On the other hand, the commission has also encouraged four companies of the OTC market by shifting them to the main board of the Stock exchange as they performed better. The rest of the companies can also perform better by abiding the rules and regulations. The BSEC will support them fully as promised by a senior BSEC official.

Pic and Article Source: https://www.tbsnews.net/economy/stocks/bsec-bid-adieu-otc-market-271354