The DSE Brokers Association of Bangladesh (DBA) has recommended incorporating necessary provisions for share buyback and merger and acquisition (M&A) of listed companies in the proposed third amendment to the Companies Act, 1994, aiming to make the country's capital market more dynamic, effective and investment-friendly.
A written recommendation signed by DBA President Saiful Islam was sent to Commerce Secretary Md Ataur Rahman Khan on Wednesday, with a copy sent to Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan for information.
In its recommendation, the DBA said there is a need to create a legal scope for share buyback by listed companies to make the capital market more dynamic and effective.
To this end, the organisation proposed including the necessary provisions in the amendment to the Companies Act, and empowering BSEC to formulate and implement rules and regulations, oversee monitoring, and ensure good governance in share buyback matters.
Similarly, DBA recommended empowering BSEC to formulate and implement necessary rules and regulations regarding M&A activities of listed companies, aiming to avoid existing complexities and lengthy legal processes involved in such transactions.
The DBA believes that since BSEC is the relevant statutory regulatory authority for the capital market and listed companies, the commission should have the power to formulate a clear and effective regulatory framework on important matters like share buyback and M&A.
This, it said, will facilitate quick decision-making, effective control, transparency and good governance.
The organisation said framing modern and effective rules on these issues will make corporate restructuring and capital management easier and more effective for listed companies.
It will also increase dynamism in the capital market and further protect the interests of investors and other stakeholders concerned.
DBA hopes that its recommendations will be given due importance and the necessary provisions incorporated in the proposed third amendment to the Companies Act, 1994, in line with the government's objectives and plans for the capital market, aiming at market development, modernisation and protection of investors' interests.