The DSE Brokers Association of Bangladesh (DBA) has recommended incorporating provisions for share buyback and merger and acquisition (M&A) by listed companies in the proposed third amendment to the Companies Act, 1994. The aim is to make the country’s capital market more dynamic, efficient, and investment-friendly. DBA President Saiful Islam sent a written recommendation to Commerce Secretary Md Ataur Rahman Khan and Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan.
The DBA proposed creating a legal framework allowing listed companies to buy back their own shares. This framework would also empower the BSEC to formulate, implement, supervise, and monitor rules and regulations governing share buybacks, ensuring good governance in the process. The association also recommended giving the BSEC authority to formulate and implement necessary rules and regulations for mergers and acquisitions involving listed companies.
According to the DBA, the BSEC, being the statutory regulatory authority for the capital market and listed companies, should have the necessary authority to establish a clear and effective regulatory framework for share buybacks and M&A. Such a framework would facilitate faster decision-making, effective regulation, transparency, and good governance. It would also make corporate restructuring and capital management of listed companies easier and more efficient.
The DBA believes that modern and effective rules on these issues would increase dynamism in the capital market and better protect the interests of investors and other stakeholders. The association expressed hope that its recommendations would be given due consideration and incorporated into the proposed third amendment to the Companies Act, 1994, in line with the government’s objectives and plans for capital market development and modernisation and protection of investors’ interests.
Share buybacks allow companies to repurchase their own shares from the open market, which can increase the value of remaining shares and signal confidence in the company’s future prospects. Mergers and acquisitions can lead to increased efficiency, market share, and competitiveness. By streamlining the regulatory framework for these activities, the DBA aims to enhance the overall performance and attractiveness of the capital market.
