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No new issue in 2004 due to deficiencies in applications

SEC chairman says

STAR BUSINESS REPORT
Shrugging off general observations that the capital market regulators hold back initial public offerings (IPOs) till the last moment, SEC Chairman Mirza Azizul Islam yesterday said the delay is mainly due to flaws in the applications.
When his attention was drawn to the fact that no IPO was released in the current year and that a post-US$80 million capital market development programme audit also made similar observation, Islam said the delay was due to inconsistencies, discrepancies and a number of deficiencies in the applications.
One of the key reasons for the delay is the submission of application at the fag end of expiry of the audited accounts of the companies, he said.
"Within 15 days from receipt of an application we point out any deficiency in the applications giving the applicants 30 days to address those and submit the application again. Then we take maximum 60 days to either approve or reject an issue. If we reject any issue we cite reasons behind turning it down," the SEC
chairman said.
When his opinion was sought on a number of other issues pointed out in the ADB report, the chairman said the Securities and Exchange Commission is looking into all the observations and will submit its comments to the relevant authorities by early next month.
"We have been asked to give our comments by July 5, 2004 and we are currently working on those. All my department heads are looking into the report and will give their comments on the observations," the SEC chairman told The Daily Star.
A three-member Operation Evaluation Mission from the ADB headquarters, which conducted the audit of the capital market development programme, presented its findings at a wrap-up meeting with senior Finance Division officials last Sunday.
After the government reviews the findings, the mission will submit its Programme Performance Audit Report to ADB top brasses in Manila.
The team observed that it was not right to replace part-time
members of the SEC with fulltimers, separate dealership from brokerage operation and segregate merchant banking, portfolio management and stock brokerage.
"The full-time member requirement was aimed at infusing dynamism and efficiency at SEC, but there are views that it has rather turned into an opaque body by removing a shred of check and balance as well as transparency and accountability in the activities of the organisation," the mission's report said.
Speaking on the ADB observation, the SEC chairman said that he personally was in favour of having full time members as SEC is quasijudicial body and a number of legal issues are there which calls for full timers.
"How do you expect a part time member to give his best in an organisation," he said.
Regarding the segregation of merchant banking operation and separation of dealership from brokerage operation, the chairman said the SEC will be able to give final comments once the department heads give their opinion on the observations.