Stock advisory committee chief for action against demutualisation bodyStaff Correspondent
The head of the stock market advisory council, Mohammed Farashuddin, has recommended for initiating action against a government committee for giving false pledge about completing the stock exchange demutualization process within four months.
He made this recommendation while mentioning some of the agendas of the capital market advisory council’s meeting scheduled to be held on 25 April.
In a letter, dated April 5, to finance minister Abul Maal Abdul Muhith, he wrote that demutualization of the stock exchanges is the key to reforming the capital market.
The letter recommended running an investigation against the committee that had made a false promise last year to complete the demutualization in four months.
Farashuddin also drew attention of Muhith on some specific suggestions made by the Asian Development Bank on demutualization including empowering independent directors in different stock market related institutions.
He also recommended immediate and firm action from the Securities and Exchange Commission against the omnibus accounts managed by the merchant banks.
He mentioned that there was allegation of market manipulation by using the omnibus accounts.
He also questioned about the delay in introducing the automated trading system in the stock exchanges.
The Dhaka and Chittagong stock exchanges last year submitted their demutualization proposals to the finance ministry saying that the process would take one year to complete.
The Dhaka Stock Exchange demutualization committee demanded separate law for demutualization and said the first phase of demutualization will be complete in three months after passing the law.
Demutualisation means separating the ownership of a stock exchange from its management to do away with the conflict of interest.
At present, member brokerage houses of DSE are owners and their elected representatives are members on the board of directors.
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