Capital market firms seek fee exemption on mandatory PLC name change
Currently, Tk50,000 fee charged by each stock exchange for name change
The Bangladesh Association of Publicly Listed Companies (BAPLC), representing listed firms, has urged the stock market regulator, the Bangladesh Securities and Exchange Commission (BSEC), to exempt companies from fees for the mandatory replacement of "Limited" with "PLC" (public limited company) in their names.
Citing that adding PLC as a partial name change is a government directive and not the firms' own decision, the association, in a letter, has requested an exemption from the mandatory Tk50,000 fee charged by each stock exchange – a total of Tk1 lakh for both the Dhaka and Chittagong stock exchanges.
As per listing rules, if an issuer of listed securities intends to change its name, it shall pay to the stock exchange a fee of Tk50,000 prior to such name change.
Of the listed firms, including banks, insurers, and non-bank financial institutions and manufacturing sector firms, 126 have already changed their names by replacing Limited with PLC, Dhaka Stock Exchange (DSE) data showed. Almost all listed banks, and some insurers and NBFIs have already complied with the Companies Act.
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Each stock exchange has earned Tk63 lakh from the Tk50,000 fee charged per company.
The BAPLC's letter noted that all public limited companies are required to adopt PLC in place of Limited in their names in line with the amendment of 11ka (Ka) of the Companies Act 1994 (Amendment in 2020).
To comply, listed companies have been adopting PLC in place of Limited, according to the letter signed by Rupali Haque Chowdhury, president of BAPLC, sent to the stock market regulator in mid-July.
In mid-August, the BSEC sought opinions from both stock exchanges on fees charged for name change under the Companies Act.
The letter stated that due to the requirement, all companies must bear additional expenses for the name change. Since the change is mandatory and not a voluntary decision of the companies, the letter argued that there is no justification for the stock exchanges to impose a Tk50,000 fee for the change.
In view of the above, the BAPLC requested an exemption from what it termed as irrational fees imposed by the stock exchanges.
According to a DSE official, the bourse has been charging the fees as required under listing rules. The regulator asked DSE's opinion regarding the issue.
34 banks already added PLC
In February 2023, commercial banks were instructed to complete legal procedures to add PLC at the end of their names, in line with an updated law, through a circular issued by the Banking Regulation and Policy Department of the central bank.
Banks are required to adopt the PLC nomenclature in compliance with the amended Companies Act 1994. The amendment was passed in 2020. Under the Companies (Second Amendment) Act 2020, banks must change their names and Articles of Association to include the PLC suffix. They also need to obtain approval from the central bank to effect the change, according to the Bangladesh Bank circular.
Following the central bank's instruction, almost all listed banks have updated their names by replacing Limited with PLC.
As of Saturday (20 September), 34 of the 36 listed banks had made the change, with National Bank and ICB Islami Bank yet to comply, according to DSE information.
