Bar on direct listings of companies lifted

State-owned, private, multilateral cos can list on bourses directly

The government lifted restrictions on direct listings of companies on the bourses “in the interest of sustainable development” of the stock market, often limping in a bearish run.

The Financial Institutions Division in a letter to the chairman of Bangladesh Securities and Exchange Commission (BSEC) on Monday informed the decision on such deeper deregulation of the market.

Following the decision any state-owned, private, and multilateral companies can get listed on the bourses directly.

Earlier, the BSEC on August 19 this year in a letter to the FID requested withdrawing the restrictions imposed in February 2010.

Usually, a company gets listed in the stock market through initial public offerings or IPO. In the case of direct listings, a company can be listed on the stock exchanges by selling existing shares.

The withdrawal of the restrictions will create an opportunity to be listed without having to go through IPO process, subject to meeting certain conditions.

The country’s stock market has loon been hungry for stocks — blue chips in particular — limiting choice for investors and stymieing its expansion.

Source: The Business Standard