Bangladesh Securities and Exchange Commission has set a three-month timeframe for the twin bourses to make recommendations on a draft prospectus of a company’s initial public offering.

It means that Dhaka or Chittagong stock exchange will have to submit its final recommendations to the regulator on any public issue within 90 days of receiving the IPO application from a company.

The stockmarket regulator issued a directive on Wednesday as the stock exchanges were taking much time to send their final recommendations on IPO.

IPO application must be forwarded to regulator within 90 days

FROM PAGEB1

The delays in submitting the final recommendations by the bourses were creating complexities for the commission in approving the IPO prospectuses.

"In the interest of investors and securities market and for the development of securities market, the stock exchanges shall comply with certain further requirements regarding public issue," BSEC Chairman M Khairul Hossain said in a notice.

The regulator would take its decision on an IPO approval after receiving and evaluating the observations and recommendations from the exchanges.

Earlier in lune last year, the twin bourses won back the authority of making recommendations on any IPO after three years, as the practice was suspended by the regulator following a conflict between the BSEC and Dhaka Stock Exchange in 2012 over the listing of a new company.

In line with the revised Public Issue Rules, 2015, stock exchanges are supposed to submit their primary recommendations to the commission within 20 days of receiving an IPO prospectus from an issuer company.

After that, stock exchanges seek clarifications from the issuer company and submit their final recommendations on the IPO to the commission within seven workdays after receiving the responses from the issuer company.

As there is no timeframe for the companies to give back the exchanges clarifications, issuer companies take much time in making responses to the bourses' queries, the officials of bourses said.

The delay made by the companies was the main reason for the bourses' hold-up in providing their final recommendations on IPOs to the commission, they said.