New IPO rule from January
In a move to bring more transparency in the initial public offering process, the stock market regulator will make it compulsory for IPO applicants to provide information on national ID card in their application forms from next year.
The new rule will come into effect on January 2009, according to the Securities and Exchange Commission.
The new law, approved in the SEC meeting in Dhaka yesterday, will limit the number of such applications, said Farhad Ahmed, the commission's executive director.
The market watchdog on many occasions found that one individual had submitted several IPO applications with fake or fictitious information changing the spelling of names, addresses and others.
Legally, one individual is allowed to submit two IPO applications -- one with a single BO (beneficiary owner's) and the other with a joint BO account.
The SEC also set December as the deadline for submitting annual maintenance fee to keep a BO account active for the next one calendar year.
The SEC imposed the annual maintenance fee of Tk 300 for each BO account in August of 2007. In case of failure, the SEC cancels or freezes any BO account.
The market regulator also approved in principle the draft rules of book-building, a modern pricing mechanism for IPO.