The Bangladesh Securities and Exchange Commission (BSEC), the regulatory authority for the stock market, has issued new guidelines for transferring listed companies to the Z category for non-compliance. From July 2, any listed company that violates specific conditions can be moved to the ‘Z’ category by the stock exchange.
On Monday (May 20), BSEC released these directives, outlining several conditions under which a company may be reclassified.
According to the guidelines, if a company fails to declare dividends for two consecutive years from the date of the last dividend declaration or from the date of listing on the stock exchange, it will be moved to the Z category. Additionally, failure to hold the annual general meeting (AGM) within the stipulated time as per law will result in the same action.
However, if an AGM is not held due to a court order or legal proceedings, this rule will not apply for up to two years, considering the extraordinary circumstances.
The guidelines also state that a company will be moved to the Z category if it ceases production for a continuous period of at least six months, except for periods allocated for restructuring or BMRE (Balancing, Modernization, Rehabilitation, and Expansion).
Furthermore, if the accumulated losses of a listed company exceed its paid-up capital, it will be transferred to the Z category.
Another condition includes failure to distribute at least 80% of the declared or approved dividends within the specified timeframe, leading to reclassification to the Z category by the stock exchange.
Trading of Z category shares will be settled on a T+3 basis.
These measures aim to ensure stricter compliance and maintain the integrity of the stock market.
