Investors allege discrimination on SME platforms
On Tuesday, investors presented 13 demands to regulators to address perceived inequities within the SME market. Currently, 20 companies are listed on these SME platforms
A group of general investors has complained to the Bangladesh Securities and Exchange Commission (BSEC) and stock exchanges, alleging discrimination after investing in the SME platforms.
On Tuesday, investors presented 13 demands to regulators to address perceived inequities within the SME market. Currently, 20 companies are listed on these SME platforms.
The investors argue that the circuit breaker for SME stocks should align with that of the main market to ensure fairness. They are also calling for the removal of the Tk30 lakh investment requirement, asserting that all investors should be able to purchase SME shares.
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Additionally, they propose severe penalties for companies that fail to distribute dividends on time and suggest replacing leadership in firms that do not comply with BSEC regulations.
They further recommend that SME companies with paid-up capital comparable to main market companies, or those fully compliant with regulations, should be allowed to trade on the main market. Firms providing a 10% cash dividend for three consecutive years should also qualify for the main market.
The investors propose that brokerage houses and merchant banks extend loan facilities for SME shares, similar to those for main market shares. They also suggest that companies transitioning from the OTC (Over-The-Counter) market to the SME platform, and meeting compliance standards, should be eligible for main market trading.
Also, they recommend that SME companies submit financial reports quarterly or semi-annually, and that companies with lower capital be permitted to increase it under specified conditions. Shares created or increased through private placement should not be listed on the SME market.
Market insiders have disclosed that the stock regulator relaxed certain rules to attract companies to the SME platforms, despite their initial unsuitability. While these companies are declaring dividends post-listing, some investors report not receiving them.
There are claims that these companies are submitting inaccurate reports to the stock exchange, falsely indicating dividend payments, leading to decreased investor confidence in the SME market.
