Roadmap by December, says Muhith

The finance minister, Abul Maal Abdul Muhith, on Monday said the Dhaka and Chittagong stock exchanges would finalise by December roadmaps for their demutualisation.

He said the government would bring necessary changes in the Companies Act 1994 and complete the demutualisation process of the bourses by December 2012.

Muhith was speaking to reporters after a meeting with the representatives of the stock market stakeholders including Securities and Exchange Commission, Investment Corporation of Bangladesh, and Dhaka and Chittagong stock exchanges at the ministry in the capital.

Meeting sources said the Dhaka and the Chittagong stock exchanges presented separate conceptual framework of the process in Monday’s meeting, but the finance minister asked them to come up with elaborate presentations on the matter.

‘The meeting was very cordial one and we would be able to complete the demutualisation process of the Chittagong Stock Exchange within 10 months after the necessary amendments to Companies Act,’ said Fakhor Uddin Ali Ahmed, president of the CSE.

He said the port city bourse had presented a framework of the demutualisation process based on a model successfully implemented in Australia, Philippines and Singapore.

Dhaka Stock Exchange president Shakil Rijvi said, ‘Demutualisation is a complex process and it requires changes in the existing laws.’

‘The DSE would be able to complete the process by December 2012,’ he said.

The probe committee for January’s market crash in its report suggested for the demutualisation of the bourses in order to curb market manipulation.

Demutualisation is a common practice in stock exchanges across the globe that separates the management and the brokerage owners from the business operation to avoid the conflict of interest.

Currently in Bangladesh, owners of the brokerage houses form the management body of the bourses.

Source: new age