A group of general investors has raised concerns with the Bangladesh Securities and Exchange Commission (BSEC) and stock exchanges, alleging unfair treatment after investing in the SME platforms. On Tuesday, the investors submitted a list of 13 demands to regulators, seeking to address what they perceive as disparities within the SME market, where 20 companies are currently listed.
One of the primary concerns highlighted by the investors is the disparity in the circuit breaker limits between SME stocks and the main market. They argue that the circuit breakers should be harmonized to ensure a level playing field. Additionally, the investors have called for the removal of the Tk30 lakh minimum investment requirement, advocating for equal access to SME shares for all investors.
The group also proposed stricter penalties for companies that fail to distribute dividends promptly and suggested replacing the leadership of firms that do not adhere to BSEC regulations. They believe that SME companies with paid-up capital equivalent to main market companies, or those that are fully compliant with regulations, should be permitted to trade on the main market. Moreover, firms that have consistently provided a 10% cash dividend for three consecutive years should also qualify for main market trading.
Another significant demand from the investors is that brokerage houses and merchant banks offer loan facilities for SME shares, similar to those available for main market shares. They also recommend that companies transitioning from the Over-The-Counter (OTC) market to the SME platform, and meeting compliance standards, should be eligible for trading on the main market.
Furthermore, the investors propose that SME companies be required to submit financial reports either quarterly or semi-annually. They also suggest allowing companies with lower capital to increase it under specific conditions, while shares created or increased through private placement should not be listed on the SME market.
According to market insiders, the stock regulator had previously relaxed certain rules to attract companies to the SME platforms, even though some were initially deemed unsuitable. Although these companies have started declaring dividends post-listing, some investors claim they have not received the promised payouts.
There are also allegations that some of these companies are submitting inaccurate reports to the stock exchange, falsely indicating that dividends have been paid, which has further eroded investor confidence in the SME market.