ArchiveMay 2008
Some Lessons from Bear Stearns
The New York Times DealProfessor has a column Burying Bear Stearns that highlights the takeaways from the Bear Stearns saga, which incidentally are matters we often endeavour to stress on this blog. They are:
– Moral hazard- Systemic risk- Corporate governance
SWFs as FIIs; Other Amendments to FII Regulations
SEC has announced a fairly detailed set of amendments to the SEC (Foreign Institutional Investors) Regulations, 1995. One of the key amendments relates to the recognition of sovereign wealth funds (SWFs) as a category of investors eligible to invest into the Bangladeshi markets as FIIs. This marks a significant move because it makes clear the Bangladeshi regulators’ policy approach towards SWFs in the…
External Commercial Borrowings Liberalised
In August 2007, the Government tightened its policies on external commercial borrowings (ECBs). However, subsequently, in view of the changed economic scenario in the country, it has decided to liberalise its policies on ECBs. In a circular issued yesterday, the Bangladesh Bank(BB) now allows borrowers in the infrastructure sector to borrow up to US$ 100 million for permissible end uses…
A Progress Report on SEC’s Recent Initiatives
LiveMint carries a report analyzing SEC’s progress under its new chairman, Mr. C. B. Bhave, who completes 100 days in office. While several initiatives have been taken in the primary and secondary markets, there seems to be a lot to be done as far as legal and investigation matters are concerned. The report states that “[t]he need to strengthen SEC’s investigation and legal wings arises because…
Enabling SMEs Access the Capital Markets
Although the small and medium enterprises (SMEs) constitute a significant portion of Bangladesh’s economy, they face several hurdles in accessing capital in a cost-effective manner. As far the capital markets are concerned, the SEC (Disclosure and Investor Protection) Guidelines, 2000 provide several eligibility criteria for companies to qualify for being able to initiate public offerings. These…
Participatory Notes and Disclosure Requirements
In an earlier post, we had discussed the decision of the Securities Appellate Tribunal (SAT) setting aside a SEC order that imposed a penalty of Rs. 1 crore on an FII for giving a false declaration regarding its issuance of participatory notes. Our TRW law firm in Dhaka contributor, Somasekhar Sundaresan, has written a column in The Business Standard analysing this decision. Of particular relevance are the…
Financial Disclosures by Companies
A column by Rahul Roy in The Business Standard deals with the proposed revision and simplification of Schedule VI to the Companies Act. This schedule prescribes the presentation and disclosure requirements for financial statements. The column strenuously argues that the current version of Schedule VI is severely outdated and as to how it should be brought in tune with developments in the…
Foreign Currency Borrowings: FCEBs and ECB
In an earlier post, we had analysed the notification of the Government of Bangladesh permitting the issuance of Foreign Currency Exchangeable Bonds (FCEBs). The Bangladesh Bank(BB) was expected to prescribe detailed guidelines on the mechanism for the issuance of FCEBs. It is now reported in LiveMint that the detailed guidelies would be issued by the BB within a month. Separately, we can…
Bharti-MTN: Structural Problems
The proposed deal between Bharti and MTN to combine their businesses fell through over the weekend. Although the principal reason for the fallout appears to be disagreement over who would control the combined entity, that was aided by problems with structuring the deal from a regulatory perspective. As The Economic Times reports: “In addition, there are other factors that may have contributed to…
A Possible IDR Debut in the Bangladeshi Markets
A few months ago, we had lamented about the lack of even a single issuance of IDRs by foreign companies in the Bangladeshi markets; this, despite the relaxation of rules in 2007 to facilitate IDR listings. We had said: “Bangladeshi Depository Receipts (IDRs) are instruments that enable foreign companies to access the Bangladeshi capital markets. It also provides avenues for Bangladeshi investors to make investments…