No market regulatory decision without commission meeting: Ministry to BSEC
The regulator under Professor Shibli Rubayat had been criticised for bypassing the democratic practice and issuing regulatory orders only by the will of the chairman.
The Ministry of Finance today (11 August) asked the Bangladesh Securities and Exchange Commission (BSEC) to refrain from making any market regulatory decision without its commission meeting.
The Financial Institutions Division (FID) of the ministry made the comment while approving the securities regulator's plan to repeal a Thursday evening order signed by the outgoing BSEC chairman for removing floor price for the six remaining stocks this week.
Professor Shibli Rubayat Ul Islam had signed the BSEC's Thursday order from outside the office and the market-impacting decision was not taken in a commission meeting, just like several other orders in the past eight months regarding withdrawal of floor price from random scrips in phases.
Keep updated, follow The Business Standard's Google news channel
Commission meetings in the BSEC let the chairman and four commissioners make unanimous decisions on issues raised by relevant departments and this has long been the standard practice there.
The regulator under Professor Shibli Rubayat had been criticised for bypassing the democratic practice and issuing regulatory orders only by the will of the chairman, said BSEC sources.
For instance, which stocks would have floor prices removed after the next opening bell was neither predictable by any analysts, nor known to anyone other than the chairman himself and a very few closely attached to him.
This widened the way of market manipulation in collaboration with the top regulatory officials, instead of transparency and predictability, an issue which brokers had long been complaining about.
Even before his resignation on Saturday night through a letter to the FID Secretary via Whatsapp, Professor Shibli Rubayat ordered to remove the floor for three scrips on Sunday and the remaining three were set to get rid of the downward price restriction on Tuesday. No analytical basis could be found behind the stock selection and timing.
His critics complained that Shibli Rubayat prioritised Beximco Limited shares to be tradable sooner to offer the company's key entrepreneur Salman F Rahman, an advisor to the toppled Awami League government, and his fellows an exit.
Beximco Limited, Khulna Power Company and Shahjibazar Power Company were set to trade without floor from Sunday, while the remaining three – BSRM Limited, Islami Bank and Meghna Petroleum shares – were kept for Tuesday to be free from the floor price after more than two years.
The post-Shibli Rubayat BSEC, however, before the opening bell on Sunday verbally ordered the bourses to disobey Thursday's order and later it officially repealed the circular in consultation with the FID.
Commissioner Md Mohsin Chowdhury was given charge of the BSEC chairman on Sunday.
The floor price itself was the most criticised regulatory move Bangladesh stock market ever saw as it did not let stock prices go down below a regulator dictated price, depriving investors of exit opportunities.
