Bangladesh Securities Exchange and Commission (BSEC) approved a proposal from Dhaka Stock Exchange (DSE) to make Chinese consortium of Shanghai and Shenzhen stocks exchanges as its strategic partner.
The capital market regulator gave the approval at its meeting on Thursday, said a BSEC official.
Earlier on Monday, the members of the Dhaka Stock Exchange (DSE) unanimously approved the proposal of the Chinese consortium to become the strategic partner of DSE.
In the 8th Extraordinary General Meeting of the DSE, the country’s prime bourse decided to sell 25 percent of its shares in block account to the strategic partner and approved the technical and financial proposals of the consortium.
Soon after declaring the approval from the shareholders, the DSE management submitted the proposal to BSEC for approval.
DSE has been trying to get a strategic partner in line with the Demutualisation Act 2013. On December 2015, the BSEC under the act directed the DSE to get a strategic investor.
After evaluating the proposals, the board of directors of DSE picked the proposal from the Chinese consortium of Shenzhen Stock Exchange and Shanghai Stock Exchange on February 10 and submitted the proposal to the BSEC on February 22.
The DSE was asked to revise the proposals again. The DSE board reconfirmed its previous decision on March 19 in favour of Chinese consortium.
As per the Act, existing shareholders, known as trading right entitlement certificate-holders or TREC-holders, will retain 40 percent shares of the exchange.
According to the DSE, the Chinese consortium has proposed Tk 22 for each share and will provide a technical support worth $37 million. The Act makes it mandatory for the DSE to sell shares to the strategic partner within five years of the demutualization.