SEC cancels two merchant banks’ licences

February 25, 2009

Approves Asia Insurance IPO
Staff Correspondent
The Securities and Exchange Commission on Tuesday approved the Asia Insurance Limited to raise Tk 9 crore through issuing initial public offering.
‘The insurance company will float 9 lakh shares of Tk 100 each,’ SEC executive officer Farhad Ahmed told reporters.
The existing paid-up capital of Asia Insurance is Tk 6 crore, the net asset value is Tk 242 and earning per share is Tk 52.16 as of May 31, 2008, he said.
The SEC on Tuesday cancelled licences of two merchant banks as they remained inoperative for long, Farhad said.
The two merchant banks are Pangaea Partners (BD) Ltd and Prime Securities and Financial Services Ltd, he said. With the cancellation of the two merchant banks, the number of merchant banks reduced to 27.
‘We have cancelled the licences of the two merchant banks as they have remained inoperative after getting licences,’ the SEC official said.
Earlier, the commission directed the two merchant banks to begin their operation by December last year in accordance with merchant banker licensing rules, he said. ‘But the merchant banks have failed to show any progress,’ he added.
Farhad said, ‘The commission has also decided to amend the rules allowing merchant banks to launch ‘profit or loss sharing’ product.’
He said under the proposed ‘profit or loss sharing’ products, the merchant banks could share funds with its clients in managing portfolios.
‘Other facilities, currently providing by the merchant banks to their clients, will remain intact,’ the SEC official said.
He said, ‘Under the proposed products, the investors will also get advisory services and expertise from the merchant banks in managing their portfolios, and this will reduce panic sales during volatility in the market. Joint investment will also make the merchant banks more responsible.’

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