Thesis Report on

Pre-requisite of Initial Public Offer (IPO) to

be listed in capital market:
a comparative study of london stock
exchange & Dhaka stock exchange.
 Thesis Report

On

Pre-requisite of Initial Public Offer (IPO) to be listed in capital market:

A comparative study between London Stock Exchange and Dhaka Stock

Exchange

Supervised by:

Mohammed Sawkat Hossain

Assistant Professor
Department of Finance & Banking
Faculty of Business Studies
Jahangirnagar University.

Submitted By:

Nur Mohammed
ID: 20123074
4th Batch
Major: Finance & Banking
Faculty of Business Studies
Jahangirnagar University.

Date: 9th January 2015

 Student Declaration

I hereby declare that the thesis report entitled Pre-requisite of Initial Public Offer (IPO) to be
listed in capital market: A comparative study between London Stock Exchange and Dhaka
Stock Exchange is submitted in partial fulfillment of the requirement for the degree of Masters of
Business Administration (MBA), Major in Finance & Banking, Faculty of Business Studies,
Jahangirnagar University.

I also confirm that this thesis report is uniquely prepared by me and both primary and secondary data
is used to show the comparison and recommendation sequentially.

____________

Nur Mohammed
ID: 20123074
4th Batch
Major: Finance & Banking,
Faculty of Business Studies,
Jahangirnagar University.
 Letter of Transmittal
9th January, 2015

The Chairman
Department of Finance & Banking
Jahangirnagar University.
Savar, Dhaka.

Through: Mohammed Sawkat Hossain, Assistant Professor-Thesis Supervisor

Sub: Submission of the Master Thesis

Dear Sir,

Its my pleasure that i have successfully completed my master thesis on Pre-requisite of Initial Public
Offer (IPO) to be listed in capital market: A comparative study between London Stock Exchange and
Dhaka Stock Exchange.

I have tried my level best to make the report informative with quality. I have really enjoyed working
in this topic and in preparing the master thesis. I hope the report will meet your expectation and
standard.

I will be truly grateful if you are kind enough to accept my report work and perform the assessment as
per your appraisal benchmark and eagerly waiting for your cooperation.

Sincerely yours.

Nur Mohammed
ID: 20123074
4th Batch
Major: Finance & Banking,
Faculty of Business Studies,
Jahangirnagar University.
 Executive Summary

In a market economy, the capital market plays a vital role in the efficient allocation of scarce
resources. Well-functioning and developed capital markets augment the process of economic
development through different ways such as encourage savings, draw more savers and users
into the investment process, draw more institution into the intermediation process, help
mobilize non financial resources, attract external resources, bring disciplines in the sick
organizations and invest for organizing production of goods and services and create
employment opportunities.

Now if a company wants to be listed in capital market and raise money through an Initial
Public Offerings (IPO) in order to float their company shares to public, it must follow a
certain legal procedures. These prerequisite may not be the same in different capital market
or exchange in various countries. In this thesis report i have tried to compare a developed
countrys capital market-selectively London Stock Exchange and a developing countrys
capital market-selectively Dhaka Stock Exchange in order to analyze the listing process of a
company.

In a typical developed country there is a multitude of financial services enabling people to

make payments; borrow at reasonable interest rates; save for retirement; and limit economic
risks through insurance. Thus raising money through Capital Market is also has strong
compliance and fair listing process so that to avoid unusual market crash or any depression in
economy. In developing countries, however, the situation is often quite different. The
financial system is less developed and financial services are less widely available or of much
poorer quality. An entrepreneur wanting to grow his business may not be able to raise capital;
a worker may not be able to earn interest on pensions savings; investors have disincentives to
invest capital due to high transaction costs or high risks. There we can see the difference
between a developed and developing countrys capital market.

The thesis report would also state that what the loopholes still exist in Dhaka stock exchange
listing policy. On the other hand London Stock Exchange has implemented many modern
techniques to make listing process fair and perfect. The regulatory body of both the country
namely Bangladesh Securities and Exchange Commission (BSEC) of Bangladesh and The
United Kingdom Listing Authority (UKLA) of UK takes the initial part of listing a company
into the capital market. Thus, each country follows their own process for IPO and listing a
company.
 TABLE OF CONTENTS

CHAPTER ONE- Introduction to the Report 03-06

1.1 Origin of the thesis report 4

1.2 Scope of the Study 4
1.3 Objectives of the study 4
1.4 Methodology of the study 5
1.5 Literature Review 5-6

CHAPTER TWO-Capital market of developed country and developing country 07-13

2.1 Introduction 8
2.2 The United Kingdom Capital Market 9
2.3 Bangladesh Capital Market 10
2.4 Why should a company be interested in IPO? 11
2.5 The Behavior of the Stock Market 11-13

CHAPTER THREE-Comparative Analysis of Prerequisite of IPO for a company in London 14-25

Stock Exchange and Dhaka Stock Exchange
3.1 Initial Public Offers - The comparative process of LSE & DSE 15
3.2 Eligibility 15
3.3 Time table and list of documents: 17-19
3.4 Appointment of Advisory Team/ Issue Manager 20
3.5 Preparing prospectus 21-25

CHAPTER FOUR- Findings of the Study 26

4.1 Comparative study 27
4.1.1 Comparative Eligibility 27
4.1.3 Comparative documents required 27
4.1.4 Appointment of Advisory Team/ Issue Manager 28
4.1.5 Comparative contents of prospectus 28
4.1.6 Others comparison 28
4.2 Number of companies enlisted through IPO 28-30

CHAPTER FIVE- Conclusion and Recommendation 31

5.1 Conclusion 32
5.2 Recommendation 33
References 34

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 CHAPTER ONE
Introduction to the Report

3|Page
1.1 Origin of the thesis report

This thesis report is prepared according to my professional experiences, visiting resourceful

persons, international research references and academic studies. And also my supervisor Mr.
Mohammed Sawkat Hossain, Assistant Professor, Department of Finance & Banking, Faculty
of Business Studies, Jahangirnagar University, who has helped a lot for all the necessary
information I needed to develop this thesis report. This thesis report is also helpful for
Bangladeshi Capital market regulators since they could understand the techniques to make
capital market more efficient like a developed countrys capital market.

1.2 Scope of the Study

I tried to collect as much information as possible to show a straight forward message to make
developing countrys capital market listing process more efficient. Share market crash,
depression or any other financial crisis could cause due to weak regulatory of capital market.
Since listing is the first step to get into the capital market, a company need to be followed a
fair and complied procedure. As we can see some unusual share market crisis in developing
countrys capital market such as Dhaka Stock Exchange in recent years, practice of a
developed countrys capital market such as London Stock Exchange could be a very good
standard for DSE to reduce the chances of these financial crises.

1.3 Objectives of the study:

The prime objective of the study is to a comparative study and evaluation of the listing
procedure and prerequisite for an interested company to be listed in capital market of a
developed country and a developing country. In this regard the specific relevant objectives of
study are as follows:

To know the capital raising process through IPO in LSE and DSE.
To know regulations, development and compliance of the regulatory bodies (BSEC &
UKLA) of both the countries.
To compare prerequisite for a company to be listed in capital market of both country.
To identify the similarity in listing at LSE & DSE.
To recommend modern techniques should be implemented in developing capital
market.

1.4 Methodology of the study

In this study data was collected and information were tabulated, processed and analyzed
crucially in order to make the paper fruitful, informative and purposeful. The report has been
prepared on the basis of the experience gained during the period of my work experience in
Merchant Banking Sector, Academic knowledge, international research references &
interviewing resourceful and capital market expert persons of Bangladesh. To prepare the
thesis report, I have collected all kinds of related data from the primary and secondary
sources.

4|Page
Primary data:
There are several ways to collect primary data. Among others important one is interviewing
resourceful and capital market expert persons of Bangladesh. For collecting primary data I
did follow interview method.

There are several types of interview method. I used only personal interview method.

Personal interview:
The primary data were collected through face-to-face interview with the DSE
officials.
The primary data were collected through participation and discussion during the
trading session.
I had also collected information through interview with the Bangladesh merchant
Bank Association (BMBA) members.
I had collected information through interview by the questionnaire with the investors
by visiting various brokerage firms.

Secondary data:
The study also used secondary data. For this purpose we collect information from various
sources such as various publications of DSE, LSE, BSEC & UKLA.

Various publications of DSE, LSE, BSEC & UKLA.

Trade journals.
Research reports connected with the stock exchange.

1.5 Literature Review

Prior to the financial crisis, one of the most important issues debated in the financial press
was whether the developed countrys capital market such as London Stock Exchange was
still the dominant destination for global financial activity, particularly the public equity
markets. For most of the previous twenty years, U.K. equity markets had been routinely
attracting the lions share of global equity activity, especially from markets that were
themselves considered relatively important. However, following the dramatic evolution in
globalization since at least the early 1990s, an increasing number of alternative destinations
have been able to develop and achieve the level of sophistication needed to attract global
equity business. This evolution has brought with it potential consequences for the geography
of financial activity and has affected the hierarchy of international financial centers.

As global financial markets return to a normal mode of operations following the crisis, this
issue of global financial competition is likely to regain prominence and receive further
impetus as markets attempt to secure more prestigious positions in the rankings by taking
advantage of the destabilization associated with the crisis. Many of these markets have
registered increasing volumes from domestic IPO and listing firms that in previous years
would have migrated to foreign destinations. Simultaneously, there has been an expansion
in the set of markets on the receiving end of cross-listing activity, which now host flows
diverted away from what had been more attractive destinations. These observed dynamics

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toward increasing globalization of equity markets are a motivation to analyze the potential
effects on companies that implement listing activity around the world.

A companys decision to list on a stock exchange has attracted great interest in the financial
literature. Research analyzing the proliferation of these foreign listings focuses on the
underlying motives and cost-benefit calculus of companies listing outside their home market
(Such as BEXIMCO Pharma listed in London Stock Exchange and many other companies
from developing countries listed in developed country). This could be due to non efficient
capital market in developing countries.

Empirical studies have documented that listing on capital market generates significant
valuation gains vis--vis firms that do not have a low cost fund raising option. We expand on
this hypothesis by suggesting that this information update should also depend on the
prerequisite of listing to a capital market whether it is a developing countrys market or
developed countrys capital market. Listing on capital market may boost visibility and
ameliorate capital costs. But if the company or Issuer carries a bad intention to manipulate
market with their floated shares-that could be a problem. This is why listing procedure must
have strong analysis and entry barrier imposing standardized compliance to be met by the
company.

Using a methodology common in analysis of entry barrier of both London Stock Exchange
and Dhaka Stock Exchange, we are able to derive a time-varying measure and test the impact
on valuation for companies listed between in the year 2013 in both the stock exchange.

In the finance literature, there is actually a long tradition of relying on market-based measures
of pre-condition of IPO. Carter and Manaster (1990), for example, propose a measure for
identifying reputable participating issuers from their relative positions on the tombstone
announcement of the offering. This measure has been used extensively in the literature to
investigate the prerequisite of issuer according to reputation and long-run performance of
IPOs (for example, Carter and Manaster 1990 and Carter, Dark, and Singh 1998). These
studies find that a company taken public by top-tier underwriters and historical financial
performance enjoys stronger long-run stock return performance. My analysis of a
comparative study of prerequisite for an interested company to be listed in capital market of a
developed and developing country is a more sophisticated variant of these earlier measures
used in the IPO literature.

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 CHAPTER TWO
Capital market of developed country and developing
country

7|Page
2.1 INTRODUCTION

A capital market is a market for securities (debt or equity), where business enterprises
(companies) and governments can raise long-term funds. It is defined as a market in which
money is provided for periods longer than a year, as the raising of short-term funds takes
place on other markets (e.g., the money market). The capital market includes the stock market
(equity securities) and the bond market (debt). Financial regulators, such as the Bangladesh
Financial Services Authority or the Bangladesh Securities and Exchange Commission
(BSEC) or The United Kingdom Listing Authority (UKLA), oversee the capital markets in
their designated jurisdictions to ensure that investors are protected against fraud, among other
duties. Capital markets may be classified as primary markets and secondary markets. In
primary markets, new stock or bond issues are sold to investors via a mechanism known as
underwriting. In the secondary markets, existing securities are sold and bought among
investors or traders, usually on a securities exchange, over-the-counter, or elsewhere.

Although in common, the term stock market is somehow abstract for the mechanism that
enables the trading of company stocks. It is also used to describe the totality of all stocks,
especially within a country, for example in the phrase "the stock market was up today", or in
the term "stock market bubble". Stock market is different from a stock exchange, which is an
entity (a corporation or mutual organization) in the business of bringing buyers and sellers of
stock together. For example, the stock market in the United States includes the trading of
stocks listed on the NYSE, NASDAQ and Amex and also in UK companies are listed in
London Stock Exchange and in Bangladesh listed in Dhaka Stock Exchange or Chittagong
Stock Exchange.

Different studies have been carried out by financial economists on the implications of stock
market development for various components of an economy. Relationships have been found
to exist between stock market development and those aspects of an economy, even though
some have been controversial, while other relationships have shown clear and significant
correlation. In this section, review and summary empirical findings are made of three studies,
which investigated the relationships between stock market development and financing
choices of firms by Demirguc-Kunt and Maksimovic (1996); stock market development and
financial intermediaries: stylized facts by Demirguc-Kunt and Levine (1996) and stock
market development and long run growth by Levine and Zervos (1996). Stock Market
Development and Financing Choices of Firms In many developing countries with emerging
stock markets, banks are fearful of stock market development because they think that stock
markets will reduce the volume of their business This article under review empirically
analyzed the effects of stock market development on firms' financing choices using data from
thirty developing and industrial countries from 1980 to 1991.

The capital market, an important ingredient of the financial system, plays a significant role in
the economy of the country. The capital market is the market for securities, where companies
and governments can raise long term funds. So if an interested Company (often referred as
Issuer) wants to raise money from capital market and be listed in stock exchanges, they
have to go through a legal procedure depending on countrys respective laws.

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2.2 The United Kingdom Capital Market

The UKLAs listing framework underpins Londons reputation for balanced and globally-
respected standards of regulation and corporate governance. Regulatory requirements in
London are principles based and provide an appropriate balance of investor protection,
practitioner certainty and flexibility. The Exchange aims to be involved in all relevant
processes where amendments or additions to the regulatory framework are considered. This is
to ensure that Londons competitive advantage remains undiminished; that listings and
subsequent capital raisings are cost effective and efficient for our companies; and that
investors have the appropriate amount of information to make informed investment decisions.

Companies with either a Premium or a Standard Listing can choose to admit to trading on the
Main Market. With a Standard Listing, a company has to meet the requirements laid down by
EU legislation. This means that their overall compliance burden will be lighter, both in terms
of preparing for listing and on an ongoing basis. Standard Listings cover the issuance of
shares and Depositary Receipts (DRs) as well as a range of other securities, including fixed-
income. Large companies from emerging markets may wish to list their DRs, thus attracting
investment from the significant international pool of capital available in London Stock
Exchange. Underpinning the Main Market is a network of experienced advisers who will
guide on the journey to an initial public offering (IPO) and provide ongoing advice once
your company is listed.

A listing on the Main Market demonstrates a commitment to high standards and provides
companies with the means to access capital from the widest set of investors. Over the last 10
years, 366 billion has been raised through new and further issues by Main Market
companies capital that has seen companies through the good times and the bad.
Responsibility for the approval of prospectuses and admission of companies to the Official
List lies with the UK Listing Authority (UKLA). The Exchange is responsible for the
admission to trading of companies to the Main Market. Joining the Main Market
consequently involves two applications: one to the UKLA and one to the Exchange.

Listing and admission to trading on the Main Market is an efficient way for companies to
access capital to fund their growth, while simultaneously benefiting from enhanced profile
and liquidity within a well-governed and regulated market structure. As an ambitious
company with plans to take business to the next level, joining the Main Market is an ideal
way to assist in realizing global aspirations.

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2.3 Bangladesh Capital Market

The Bangladesh Securities and Exchange Commission (BSEC) exercise powers under the
Securities and Exchange Commission Act 1993. It regulates institutions engaged in capital
market activities. Bangladesh Bank exercises powers under the Financial Institutions Act
1993 and regulates institutions engaged in financing activities including leasing companies
and venture capital companies. The BSEC has issued licenses to 53 institutions to act in the
capital market. Of these, 19 institutions are Merchant Banker & Portfolio Manager while 37
are Issue Manager, Underwriter & Portfolio Manager. There are two stock exchanges (the
Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) ) which deal in the
secondary capital market.

A stock exchange is an entity that provides "trading" facilities for stock brokers and traders,
to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue
and redemption of securities and other financial instruments, and capital events including the
payment of income and dividends. Securities traded on a stock exchange include shares
issued by companies, unit trusts, derivatives, pooled investment products and bonds.

To be able to trade a security on a certain stock exchange, it must be listed there. Usually,
there is a central location at least for record keeping, but trade is increasingly less linked to
such a physical place, as modern markets are electronic networks, which gives those
advantages of increased speed and reduced cost of transactions. Trade on an exchange is by
members only.

The initial offering of stocks and bonds to investors is by definition done in the primary
market and subsequent trading is done in the secondary market. A stock exchange is often the
most important component of a stock market. Supply and demand in stock markets are driven
by various factors that, as in all free markets, affect the price of stocks.

There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be
subsequently traded on the exchange. Such trading is said to be off exchange or over-the-
counter. This is the usual way that derivatives and bonds are traded. Increasingly, stock
exchanges are part of a global market for securities. Bangladesh capital market is one of the
smallest in Asia but the third largest in the south Asia region. It has two full-fledged
automated stock exchanges namely Dhaka Stock Exchange (DSE) and Chittagong Stock
Exchange (CSE) and an over-the counter exchange operated by CSE. It also consists of a
dedicated regulator, the Bangladesh Securities and Exchange Commission (BSEC), since, it
implements rules and regulations, monitors their implications to operate and develop the
capital market. It consists of Central Depository Bangladesh Limited (CDBL), the only
Central Depository in Bangladesh that provides facilities for the investors.

Application to BSEC for Capital raise through IPO

1
BSEC approves to raise capital from public and thereby collect subscription
2 money from public

DSE and CSE takes the final step to enlist in stock exchange.
3

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2.4 Why should a company be interested in IPO?

There is no single reason which triggers a company to seek a listing for its shares. Typical
examples of why a company may seek a listing are:

Raising Capital for Businesses: The stock exchange provides companies with the facility to
raise capital for expansion through selling shares to the investing public.

Mobilizing Savings for Investment: When people draw their savings and invest in shares, it
leads to a more rational allocation of resources because funds, which could have been
consumed or kept in idle deposits with banks, are mobilized and redirected to promote
business activity with the benefits for several economic sectors such as agriculture,
commerce and industry, resulting in a stronger economic growth and higher productivity
levels.

Facilitate Company Growth: Companies view IPO as opportunity to expand product lines,
increase distribution channels, hedge against volatility, increase its market share or acquire
other necessary business assets. A takeover bid or merger agreement through the stock
market is the simplest and most common way to company growing by acquisition or fusion.

Redistribution of Wealth: By giving a wide spectrum of people a chance to buy shares and
therefore become part owners (shareholders) of profitable enterprises, the stock market helps
to reduce large income inequalities. Both casual and professional stock investors through
stock price rise and dividends get a chance to share in the profits of promising business that
were set up by other people.

Corporate Governance: By having a wide and varied scope of owners, companies generally
tend to improve on their management standards and efficiency in order to satisfy the demands
of these shareholders and the more stringent rules for corporations by public stock exchange
and the government. Consequently, it is believed that public companies (companies that are
owned by shareholders who are members of the general public and trade shares on public
exchanges) tend to have better management records than privatively held companies (those
companies where shares are not publicly traded. often owned by the company founders
and/or their families and heirs or otherwise by a small group of investors). However, some
well-documented cases are known where it is alleged that there has been considerable
slippage in corporate governance on the part of some public companies (e.g famous Enron
Corporation, MCI WorldCom, Pets.com. Webvan or Parmalat).

Creates Investment Opportunities for Small Investors: As opposed to other businesses

that require huge capital outlay, investing in shares is open to both the large and small stock
investors because a person buys the number of shares they can afford. Therefore the stock
exchange provides an extra source of income for small savers.

2.5 The Behavior of the Stock Market

According to the efficient market hypothesis (EMH), only changes in fundamental factors,
such as profits or dividends, ought to affect the share prices. But this largely theoretical

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academic viewpoint also predicts that little or no trading should take place-contrary to fact-
since prices are already at or near equilibrium, having priced in all public knowledge.
However, the efficient market hypothesis is sorely tested by such events as stock market
crash in 1987, when the Dow Jones index plummeted 22.6 percent the largest ever one day
fall in the United States. This was part of the world wide crash of stock markets which did
not originate in the United States. The event demonstrated that share prices can fall
dramatically even though, to this day, it is impossible to fix a definite cause. A thorough
search failed to detect any specific or unexpected development that might account for the
crash. It also seems to be the case more generally that many price movements are not
occasioned by new information; a study of the fifty largest one day share price movements in
the United States in the post war period confirmed this (Source: Cutler, D. Poterba, J. &
Summers, L. (1991), Speculative dynamics, Review of Economic Studies 58, pp. 520-546).
Moreover, while the EMII predicts that all price movement, in the absence of change in the
fundamental information, is random (e.g non-trending), many studies have shown a marked
tendency for the stock market to trend over time for periods of weeks or longer.

As a developing country, Dhaka Stock Exchanges behavior seems volatile and not acted as
an efficient market. Bangladeshi capital market has already experienced market crashes in
1996 and 2010. In 1996, the picture of the country's capital market was totally different than
today. Paper shares were sold in front of the Dhaka Stock Exchange (DSE) at that time. So, it
was difficult for investors to differentiate between fake share and original shares. The fourth
quarter of the year 1996 witnessed feverish activities on the DSE and on the comparatively
smaller Chittagong Stock Exchange (CSE).

It is a matter of great regret that the BSEC, the central bank and other stakeholders are also
blaming one another. This ultimately proves the lack of coordination among them in policy-
making and policy implementation. The Bangladeshi share market collapse was
fundamentally due to the unstable position; the instantaneous cause of the collapse is
secondary. In the same vein, the growth of the sensitivity and the growing instability of the
market explains why attempts to unravel the local origin of the crash have been so diverse.
Essentially anything would work once the system is ripe. As a consequence, the origin of
crashes is much more stable then often thought, as it constructed progressively by the market
as a whole, as a self-organizing process. In this sense, the true cause of a crash could be
termed a systemic instability. Systemic instabilities are of great concert to governments,
central banks and regulatory agencies.

Other research has shown that psychological factors may result in exaggerated stock price
movements. Another phenomenon also from psychology that works against an objective
assessment is group thinking. As social animals, it is not easy to stick to an opinion that
differs markedly from that of a majority of the group. An example with which you may be

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familiar is the reluctance to enter a restaurant that is empty; people generally prefer to have
their opinion validated by those of others in the group.

In one paper the authors draw an analogy with gambling. (Source: Stephen Morris and Hpm
Song Shin, Oxford Review of Economic Policy, vol. 15, no 3, 1999) In normal times the
market behaves like a game of roulette; the probabilities are known and largely independent
of the investment decisions of the different players. In times of market stress, however, the
game becomes more like poker (herding behavior takes over). The players now must give
heavy weight to the psychology of other investors and how they are likely to react
psychologically.

To end this section on the behavior of the stock markets, it will be worthwhile to share with
the readers of this study a famous quote from the preface to a published biography about a
well-known and long term value oriented stock investor, Warren Buffet-who began his career
with only 100 U.S. dollars and has over the years built himself a multibillion-dollar fortune.
The quote illustrates something of what has been going on in the stock market during the end
of the 20th century and the beginning of the 21st,

With each passing year, the noise level in the stock market rises. Television commentators,
financial writers, analysts, and market strategists are all over talking each other to get
investors' attention. At the same time, individual investors, immersed in chat rooms and
message boards, are exchanging questionable and often misleading tips. Yet, despite all this
available information, investors find it increasingly difficult to profit. Stock prices skyrocket
with little reason, then plummet just as quickly, and people who have turned to investing for
their children's education and their own retirement become frightened. Sometimes there
appears to be no rhyme or reason to the market only folly (Hagstrom, R.G. (2001), The
Essential Buffet, John Wiley & Sons, Inc. New York).

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 CHAPTER THREE
Comparative Analysis of Prerequisite of IPO for a
company in London Stock Exchange and Dhaka
Stock Exchange

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3.1 Initial Public Offers - The comparative process of LSE & DSE

Listing a company requires a authentic process in both developing and developed countrys
capital market. Comparing two different capital markets we observed humongous similarity
in processing an IPO. There are only differentiation in two capital market is that the ways to
pursue it. In this section we will learn the process of listing a company in capital market in
both countries.

In UK, Responsibility for the approval of prospectuses and admission of companies to the
Official List lies with the UK Listing Authority (UKLA), a division of the Financial Conduct
Authority (FCA). The Exchange is responsible for the admission to trading of companies to
the Main Market. In Bangladesh, Responsibility for the approval of prospectuses and
admission of companies to the Official List lies with the Bangladesh Securities and Exchange
Commission and The Dhaka Stock Exchange is responsible for the admission to trading of
companies to the Main Market.

3.2 Eligibility

For London Stock Exchange

An issuer will generally select its preferred market and listing category in consultation with
its advisers prior to engagement with the UKLA. For issuers requesting a Premium Listing of
their equity shares, contact with the UKLA will be undertaken by the issuers appointed
sponsor firm. To start the eligibility process, the UKLA generally expects that a letter is
submitted detailing the issuers compliance with the applicable eligibility requirements. The
UKLA suggests that such letters are sent in as early as possible in the IPO process and that
they are as detailed as possible, including relevant background information on the nature of
the issuers business. This is because unnecessary delay can be caused to the timetable where
significant eligibility concerns arise late in the IPO process.

Issuers seeking a Premium Listing of equity shares will be required to comply with the more
substantive eligibility requirements that are imposed by the super-equivalent parts of the
Listing Rules, in addition to those requirements in the Listing Rules based entirely on EU
law.

For commercial companies, these additional requirements include the requirement for a clean
three-year track record of operations, and the requirement for a clean working capital
statement for at least the next 12 months. For investment entities, these requirements include
an additional degree of regulation in relation to the corporate governance of the issuer.

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 The London Stock Exchange Eligibility Criteria

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For Dhaka Stock Exchange

The followings are the eligibility criteria for DSE listing:

Key Eligibility Criteria Premium Shares At Par Shares

Paid Up Capital
Minimum IPO amount
Commercial operation
Audited Historical Information
Profit Requirement
Corporate Governance abidance
Credit rating
Sponsors/ directors of the
company jointly hold minimum
Each individual director must hold
minimum
CIB Clearance
Trade License, Fire License,
Environment Clearance
certificate, Income Tax Clearance
certificate, VAT registration
certificate, Boiler License or any
other certificate
Control over all of the assets
described in accounts
Minimum 30 crore Minimum 30 crore
12 crore or 10% of paid up capital, 12 crore or 10% of paid up capital,
whichever is higher whichever is higher
Last 5 years Last 3 years
Last 5 years Last 5 years
No Cumulative loss and must have No Cumulative loss and must have
profit of last 2 years profit of last 2 years
Required Required
Required (also for Mandatory for Not Mandatory
Bank, Insurance & NBFI)
30% of floating 30% of floating
2% of total floating 2% of total floating
Required Required
Valid & up-to-date. Valid & up-to-date.
Fully owned by company Fully owned by company

Listing Process is regulated by two regulations at Dhaka Stock Exchange Limited (DSE).
They are:

1. The Listing Regulations of the Dhaka Stock Exchange Limited

2. The Dhaka Stock Exchange (Direct Listing) Regulations 2006

There are three possible ways to get listed with DSE

1. Listing after Initial Public Offer (IPO)

2. Offloading of Shares of Government owned companies and become listed under
Dhaka Stock Exchange (Direct Listing) Regulations 2006
3. Unlisted Subsidiaries of listed companies can become listed through issuance of
specie dividend, right shares or any similar distribution in accordance with The
Listing Regulations of the Dhaka Stock Exchange Limited

3.3 Time table and list of documents:

For London Stock Exchange

From start to finish, the approval from UKLA and listing process through IPO in LSE can
take some four to six months and, whilst each transaction will differ, there are common
themes in each process which are worth noting.

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The timetable will map out the entire transaction and will set out responsibilities for various
actions. This should include, as a first step, the preparation of a transaction structure report by
the solicitors to the issuer. The purpose of this report is to identify hurdles to the process.
Appropriate resources can then be applied to resolving problem areas. At this early stage, any
timetable for the final transaction stages will be fairly broad-brush but should show likely
marketing and admission dates.

To join UK capital markets, Companies need to show that they have met the minimum
requirements of UKLA. Companies must also commit to comply with their Standards.
However, the authority retains discretion and flexibility so that, in appropriate circumstances,
some areas of the Standards can be tailored to reflect an individual companys needs.
Derogation requests from these Standards should be made in writing to the Primary Market
Regulation Team and give sufficient time for the Exchange to consider the request.

Issuers seeking admission to the Specialist Fund Market should have regard to the document
Specialist Fund Market: Guidance for Admission to Trading for New Applicants which is
available on the Exchanges website. Issuers seeking admission to the High Growth Segment
should have regard to the High Growth Segment Rulebook which is available on the
Exchanges website and which applies to all companies seeking admission or admitted to that
segment and their Key Advisers (as such term is defined in those rules), in addition to these
rules.

Prior to admission, new applicants who are applying for admission to trading must comply
the followings condition/documents:
The issuer must be duly incorporated and operating within its memorandum and
articles.
If the issuer is applying for a Premium Listing, it must have three years of audited
accounts, which are consolidated accounts and independently audited in accordance
with IFRS or an equivalent standard and have been reported on by the auditors
without modification.
The accounts must be the latest accounts for a period ended not more than six months
before the date of the prospectus. There is an overriding provision in the Listing Rules
that a three year track record is not needed where it is desirable in the interests of
investors and investors have the necessary information to arrive at an informed
judgment about the applicant and the securities for which listing is sought
If the issuer is applying for a Premium Listing, its business must be operated
independently and have been revenue generating for the period covered by the
accounts. The new applicant must also demonstrate that at least 75 per cent of its
business is supported by a historic revenue earning record which covers the three year
period of the accounts and that it controls the majority of its assets and has done so for
at least that three year period.
For all new applicants or for issuers whose securities are already listed on the
Premium Segment but are in the process of issuing a Class 1 circular, or any circular
with proposals on refinancing or reconstruction, a working capital statement will need
to be included concerning the groups present working capital requirements (covering
at least the next 12 months).

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 A copy of the Regulated Information Service announcement relating to the admission.
For issuers for whom the competent authority is the FCA. The preparation of a
financial statement structure report by the solicitors to the issuer.
The fees structure of listing a company in LSE is as follows:

For Dhaka Stock Exchange

There is no certain time limit for getting approval from BSEC to raise capital through IPO. It
depends on issuers response to the query of BSEC or the documental/ legal clearness of the
company. Usually it takes minimum six months to more than a year to get approval from
BSEC. But after getting approval from BSEC it takes only one to three month to go live in
trading shares in DSE.

Prior to admission, new applicants who are applying for admission to trading must submit the
followings document:

Ten Copies of Draft prospectus in hard form

Certified copy of the Memorandum & Articles of Association
Audited Financial Statements for last five years
Board of Directors Resolution
Bank Certificate for issue of capital in cash
Tax Clearance certificate up to June 30, 2012
Return of Allotments
Summary of Share Capital, Schedule-X
Notice of increase share capital (Firm IV)
Notice of the consolidation (Form III)
Particulars of the Directors (Form-XII)
The consent letters of the Bangladesh Securities & Exchange
Application Fees Tk. 10,000/-
Bankers to the issue agreement
Issue management agreement
Underwriting agreement
Licenses & Certificates

The fees structure of listing a company in DSE is as follows:

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 Market Capitalization (Taka) Cumulative maximum fees (Taka)
Up to Tk. 100 million 250,000
(@0.25%)
Tk. 101 million to rest of the amount (@0.15%) 1,750,000

Total (Maximum payable to DSE) 2,000,000

3.4 Appointment of Advisory Team/ Issue Manager

For London Stock Exchange

At the outset, the issuer appoints its advisory team to include a sponsor or nominated adviser
or corporate adviser (as appropriate depending upon the relevant market, but throughout this
guide, referred to as sponsor), solicitors, reporting accountants, stockbroker, PR agent,
share registrar and printers. The printers and the share registrar will usually be organized by
the sponsor. Each adviser will need to enter into an engagement letter with the issuer setting
out the scope of the appointment and the terms and conditions including payment. These
engagement letters may include limitations on liability and indemnities, all of which will be
the subject of negotiation.

The roles of Adviser in UK:

Over all co-ordination and

project management of IPO
process, due diligence
Prospectus.

Advising the company to Develop investment case,

prepare financial report
and auditors, legal adviser,
The valuation and offer
structure, marketing,
tax consultant & other due
diligence
Company distribution and allocation
of fund from investors.

Manage All types of

communication related to
IPO process with
Underwriters, LSE & UKLA

For Dhaka Stock Exchange

An interested company must appoint an Issue Manager from Bangladesh Securities and
Exchange Commission (BSEC) approved Issue Managers to pursue IPO process. The Issue
Manager and company jointly decide the method of IPO Fixed Price or Book Building; that
suits best for company. Basically Issue manager works as an expert media to introduce
company to investor or the regulatory body. The Issue Managers should strive to actively
share issuerelated work and information gathered from the Agencies and other sources. The
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issue managers develop the Committees concerns, responses and prepare a draft advice
framework including a brief background discussion. This draft advice will serve as a focal
point for discussions and to identify potential concerns. The Issue Managers responsibilities
are as follows:

The roles of Issue Managers in Bangladesh:

Preparing prospectus
with the conformity
with valid document,
materials, legal
requirement & true
view.
Managing Investors of
thje company,
conducting lottery, Due Diligence in all
alotting shares to the the IPO related
successful investor and disclosure of the
advising company to company.
keep proper capital The
strusture
Company

Manage All types of Develop investment

communication related case, valuation and
to IPO process with offer structure,
Underwriters, Bankers marketing, distribution
to the issue, DSE & and allocation of fund
BSEC from investors.

3.5 Preparing prospectus

A prospectus must be published by a company before its securities can be listed and admitted
to trading on the Main Market. A prospectus sets out detailed information about a companys
business, management and financial information, and there are detailed provisions in each
countrys rules related to Prospectus Rules and the Regulation regarding its content. The
prospectus and its contents also form the base for marketing any offering to potential
investors. The followings are the format of prospectus in both capital markets.

For London Stock Exchange

Before a company can be listed, the sponsor must get a companys prospectus approved by
the UKLA. Although the prospectus is a legal document, it is also a marketing tool to help to
sell shares to potential investors. A companys adviser usually takes the primary
responsibility for drafting the prospectus although the sponsor/book runner(s) assist a
company in crafting the appropriate marketing story. The drafting of the prospectus takes
several weeks and will involve all advisers. A number of drafting sessions will take place on
various sections of the document. From a marketing perspective, the prospectus outlines a
companys strengths, strategy and market opportunity. The precise areas that must be covered
in a prospectus, such as the inclusion of risks relating to a company.

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The sponsor is responsible for submitting drafts of the prospectus to the UKLA. The UKLA
is allowed 10 business days after the first submission to respond to the sponsor with a
comment sheet. The company and its advisers will then revise the prospectus so that the
sponsor can submit an updated draft with the UKLA for a further review. For the second and
subsequent drafts, the UKLA responds via its comment sheet within five business days. As
every transaction is unique, it is impossible to predict exactly how long this process will take.
However, as a rule, the timeframe is approximately six to eight weeks from initial submission
of the prospectus to the UKLA (approximately three to four submissions) to preliminary
approval ahead of launching the transaction. Key areas of prospectus include:

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For Dhaka Stock Exchange

Bangladesh Securities and Exchange Commission (BSEC) approves the companys

prospectus before listing. Prospectus is a legal document of a company used as a marketing
tool to sell shares to potential investors. Issue Manager of the company takes the primary
responsibility for drafting the prospectus as per the requirement stated in Public Issue Rules,
2006, with the help of issuer.

Summary of Prospectus contain

Material Information This part of prospectus is required to enable investors
to make an informed assessment of the business
engaged in or to be engaged by the company.
Table of contents A detailed table of contents showing the various
sections or subdivisions of the prospectus and the
page number on which each such section or
subdivision begins shall be given
Risk Factors & Management Perception about the All risk factors and management perception about the
risks same are being cleared in this section of prospectus.
Use of Proceeds This part shall show how the net proceeds of the
offering shall be used, indicating the amount to be
used for each purpose.
Description of business The prospectus shall contain the information in
respect of its business operation, for example,
principal product, revenue contribution of products,
associates/subsidiary or related company name and
description, competitive condition of business, source
and availability of raw material, customers &
suppliers name, number of employees etc.
Description of property Location of the principal plants and other property,
whether its taken on lease or owned by company
shall be disclosed here.
Plan of operation and discussion of financial Projected financial statement, historical financial
condition statement, internal & external source of cash,
Leverage etc.
Directors and Officers The details of directors and Officers shall be disclosed
in this part.
Involvement of Directors and Officers in certain legal Whether any bankruptcy or any other legal
proceedings proceedings taken against the company or any
directors of the company or any officers of the
company shall be disclosed here.
Ownership of the companys securities The prospectus shall disclose the name and address
of any person who owns the pre-IPO shares of the
company.
Rationale of determination of offering Price and net A strong rationale of determining offering price and a
tangible asset per share financial ratio analysis shall be disclosed in this part
Latest financial statement A valid and latest financial statement shall be
disclosed at the end of a prospectus.
Whole process in nutshell to be listed in DSE:

Decision to go Public
Appoint Issue Manager from Bangladesh Securities and Exchange Commission
(BSEC) approved Issue Managers

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 Decide method of IPO with assistance from Issue Manager Fixed Price or
Book Building>
In case of IPO under Book Building - Get Accounts audited by BSEC approved
Panel of Auditors
Initiate process for credit rating - Mandatory for Bank, Insurance, NBFI and any
issue with offer price at premium
Develop a Company Website with publications of Company Financials

2. Prepare Draft Prospectus

Assist Issue Manager in preparing Draft Prospectus in accordance with
Securities and Exchange Commission (Public Issue) Rules, 2006
Appoint Bankers to Issue, Underwriters etc.
In case of IPO under Fixed Price Method fix a offer price and justify the same in
accordance with rules mentioned in the Securities and Exchange Commission
(Public Issue) Rules, 2006
In case of IPO under Book Building Method prepare a Information
Memorandum with Financials for Road Show and Indicative Price
Determination in accordance with rules of the Securities and Exchange
Commission (Public Issue) Rules, 2006

Host road shows with all Eligible Institutional Investors

(EII)
Collect offers from all EIIs
Finalize a indicative price

3. Apply to BSEC for Public Offer

Apply to BSEC for IPO under Securities and Exchange Commission (Public
Issue) Rules, 2006. Submit copies of Draft prospectus to Exchanges
simultaneously.
Fulfill any discrepancy identified by BSEC in Draft Prospectus and respond to
any queries made by the Exchanges.
Assist Issue Manager in updating draft prospectus to comply with or fulfill
deficiencies identified by BSEC and any issues identified by the Exchanges.

4. IPO Approved
Print Abridged version of the approved and vetted prospectus in widely
circulated Bengali and English News Papers
Print Final Prospectus
Publish Soft Copy of vetted Prospectus on Company Website within 3 working
days
Apply for Listing with Exchanges in accordance with regulations of the Listing
Regulations of the Exchanges
Appoint a Post Issue Manager

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 5. Bidding by EIIs (for Book Building only)
Apply to Exchanges for holding bidding with BSEC approved Indicative price
On completion of bidding collect allotment list for EII and cut-off price for
subscription from the Exchanges

6. Subscription, Lottery
Start subscription for IPO through designated Bankers to the Issue
Assist Issue Manager and Post Issue Manager in completing formalities related
to subscription, lottery, refund and crediting shares to successful allottees
After Subscription period submit subscription status to BSEC and the Exchanges
where the issuer wishes to get listed
In case of over subscription hold lottery

7. Allotment and Refund

Process all subscriptions and lottery results
Distribute Allotment letter and Refund Warrants
After distribution of allotment letters/refund warrants submit a compliance
report before the Commission and the Exchanges

8. Listing Approval by the Exchanges

After distribution of allotment letters/refund warrants and compliance of other
requirements, the application for listing by the Issuer is considered complete
and is placed for listing approval
Listing is approved or rejected

9. Credit Share/Units
If listing is approved by any of the Exchanges, issuer apply to CDBL for
crediting tradable shares/units as per allotment

10. Commencement of Trading of scrips on the Bourse(s)

Once shares/units are credited and confirmed by CDBL, commencement date for
trading is announced by the respective Exchange

25 | P a g e
 CHAPTER FOUR
Findings of the Study

26 | P a g e
4.1 Comparative study:

Comparative analysis of two different capital markets is quite clear. We have found several
loopholes still exist in the listing process in Dhaka Stock Exchange. On the other hand
London Stock Exchange has implemented several advanced techniques which facilitate a
quick time.

4.1.1 Comparative Eligibility

Since information is available through a centralized system in UK, any information and
registration or license related clearance status can be obtained from governments centralized
database system. UKLA and Financial Services Authority (FSA) jointly ensure the
transparency and eligibility for IPO application. Every step toward growing a company is
closely observed and all the information is recorded in database. So it becomes easier for a
company in UK whether it is eligible for IPO application or not. Basically eligibility criteria
are so simple in UK for IPO application that being a registered company in UK already
becomes eligible by maintaining business rules.

But according to Bangladesh capital market, RJSC and BSEC is the initial certificatory for
stating a company eligible for IPO application. Thus an interested company has to maintain a
time consuming long process to get eligibility in order to apply for an IPO. No central
database of any company and scattered collection of information by different regulatory
bodies of the Government make eligibility criteria more complex, non-transparent and long.

4.1.2 Comparative required time frame

From start to finish, the approval from UKLA and listing process through IPO in LSE can
take some four to six months. It has become so fast because the company who apply for IPO
has already get clearance from FSA for their transparency and legality in financial reporting.
UKLA only examines the basic criteria and the market prospect of the interested company.

On the other hand, BSEC verifies all the Financial reporting, legal compliances and legal
certificates obtained from different bodies. Thus it takes minimum six to twelve months and
in some cases more than that to enlist a company in DSE.

4.1.3 Comparative documents required

Since UK implemented a centralized system of database where regulatory bodies get instant
access to check any registered companys status, it required to fill just few forms to apply for
IPO. And even the forms can be filled in online thus no physical documents are required for
IPO application.

27 | P a g e
The current practice of Bangladesh is to submit a long list of documents related to companys
legal registration and physically hand over all the copies of it to BSEC. Thus collecting all
these documents from different regulatory bodies can be a hassle for the interested
companies.

4.1.4 Appointment of Advisory Team/ Issue Manager

There are not much different in appointing Advisory team or Issue manager for IPO by the
companies. In UK this third party is called Advisory team and in Bangladesh it is referred
as Issue Manager. The function of Advisory team and issue manager is almost same.

4.1.5 Comparative contents of prospectus

Contents of prospectus are very important for a company to offer IPO. Since prospectus is a
public document and potential investors deals with it, both countrys regulators has an
authentic guideline to prepare this document.

After analyzing both countrys requirement we did not find any major difference in content.
But availability of prospectus in soft form is more expected in UK not in Bangladesh.
Bangladeshi investors prefer physical or printed form of prospectus. This is why IPO offering
company has to expend more in printing prospectus than the company in UK.

4.1.6 Others comparison

If an issuer is considered by the Nomad to be appropriate, then the pre-conditions to joining

Are; a prospectus or an admission document be published (in English) which should be made
available, free of charge, for at least one month following admission (if a prospectus is
required it must be approved by the UKLA and BSEC in both country. The securities to be
admitted to trading must be freely transferable, the issuer must have and must retain a Nomad
and broker, and appropriate arrangements must be in place to enable trades in the relevant
securities to be settled. Although LSE is far more stable and efficient market than DSE,
Listing process of IPO is almost same in both stock exchange. Use of advanced and computer
based technology must be more frequent in order to make DSE closely compared to LSE.

4.2 Number of companies enlisted through IPO

As would be expected, the number of companies enlisted through IPO varies greatly between
the two stock exchanges. In LSE, at the period 2012 there was 99 companies enlisted whether
in DSE the number of company enlisted was only 18. In the year 2013 at LSE, total number

28 | P a g e
of IPO was 158 and in DSE this number was 11. The following charts are showing the
number of comparative IPOs in both stock exchanges:

Number of IPO

160

140

120
number of companies

100

80

60

40

20

0
2013 2012 2011 2010
LSE 158 99 122 152
DSE 11 18 12 21

In the year 2013, the following companies were enlisted showing pie chart according to
business sector:

DSE: Sector wise IPO approved in 2013

Pharmaceuticals &
Chamicals
8%
Agriculture
17%
Mutual Fund
17%
Textile &
NBFI
Garments
8%
25%

Engineering
25%

29 | P a g e
 LSE: Sector wise IPO approved in 2013
Mining Food & Beverage
6% 4% Real estate
7%

Others
13%
Travel & leisure
4% Mutual Fund
13%
IT & Computer Bank & Financial
14% Services
14%

Oil & Gas General retailer

6% Engineering Health Care 8%
6% 5%

A listed company distributing shares of its "unlisted" subsidiary company in the form of
specie dividend, right shares or any similar distribution shall get such subsidiary company
listed on the Exchange within a period of 120 days from the date of approval of such
distribution by the shareholders at the meeting of such company.

In case of failure of such subsidiary company to apply for listing or refusal by the Exchange
for such listing on account of insufficient public interest, or for any other reason whatsoever,
the Company distributing specie dividend shall encash the shares of the subsidiary company
at the option of the recipients at the price not less than the current break-up value or face
value, whichever is higher, within 30 days from the expiry of 120 days or from the date of
refusal of listing whichever is earlier, failure in which behalf shall be default in which event
the trading in the shares of the listed company be suspended by the Council or the company
de-listed.

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 CHAPTER FIVE
Conclusion and Recommendation

31 | P a g e
5.1 Conclusion

Business operations and capital flows are becoming increasingly globalized as new centers of
economic strength and innovation develop around the world. Future market-leading
companies are springing up in such places as Bangladesh, India and South Asian countries, in
addition to the mature economies as US, UK and Japan. While the majority of companies
ultimately choose to list on their domestic stock exchanges, more and more business leaders
today are considering the pros and cons of accessing public capital in a foreign market. Stock
exchanges are also working hard to take advantage of the global opportunities that arise in
this environmentwhether by pursuing new listings from abroad or accessing foreign
markets through mergers, acquisitions and strategic alliances. Business leaders today have
many options to consider when selecting a stock exchange for an initial public offering.

The LSE has invested considerable resources in a four-part Technology Road Map, a
program intended to bring the exchanges trading technology into the next generation. The
most recent step has been the deployment of the Infolect market data system, an improvement
that has reduced the average speed of trade execution to two milliseconds, about 15 times
faster than previously. But DSE is yet to implement any new and advanced technology to
make IPO process fast and transparent.

LSE is also focusing on lowering the costs of its technology for customers. But in the DSE
point of view, IPO cost and complexity still seems very high that could frustrate an interested
company to offer IPO. Companies listing in the UK must observe high standards of corporate
governance but do not have to comply with the potentially costly requirements. As a result of
the perceived regulatory advantage, there is some concernperhaps overblownin the
London business community that the LSE could be exposed to regulatory creep whether
DSE has no such advantages.

This paper has provided a comprehensive review of the IPO process to be listed in the stock
markets of UK and Bangladesh. It has surveyed analyses and evidence from both developed
and developing countries in order to assess how best, if at all, can stock markets contribute to
economic growth.

The paper has two main messages First, in relation to low-income developing countries
which do not yet have established stock markets efficiently or have only rudimentary ones. It
is suggested that these countries will be better off by encouraging the development of banks
rather than expend their human and material resources on establishing stock markets. As far
as middle-income countries are concerned, many of whom have well established stock
markets; these must be regulated to ensure that they do not become a source of instability or

32 | P a g e
short-termism in the economy. For this reason, middle-income countries should discourage
the emergence of a market for corporate control. These countries should find other
institutional ways of replacing inefficient managements which are reliable and cheap
compared with the takeover device on the stock market.

5.2 Recommendation

The number of IPO approval should be much more in a year than the current
performance of DSE. Whether the application for IPO is in an average of 100 per year
and approved only 10-20 against these applications.

The manpower of BSEC should be increased in order to accelerate the number of IPO
approval in a year.

There should be an integrated database of company information in Bangladesh like

UK, so that all the certification and legal approval for a company can be obtained
from one centralized source. This system could definitely reduce the hassle of
arranging a long list of documents of company to apply for IPO in Bangladesh.

Every legal part of a company should be approved from the respective regulatory
body. Like in UK, financial statement certifies by FSA and other legal documents
certifies by the respective regulatory body. Such as Financial statement should be
approved from ICAB (Institute of Chartered Accountant of Bangladesh), Secretarial
Documents (i.e. particulars of directors, summary of share capital etc) should be
approved from RJSC (Registrar of Joint Stock & Companies), Tax clearance should
be done by NBR (National Board of revenue) etc. And most importantly these
documents should be believed and well accepted by BSEC without wasting time on
investigating on these documents. This review or investigations on these legal
documents by BSEC definitely make approval time of IPO lengthy.

Enlisting process of DSE should use more advanced computerized system.

Trading of securities must be more closely observed by DSE. We rarely see any
particular instrument or security touch in the circuit breaker level in London Stock
Exchange. But in Dhaka Stock Exchange, almost everyday many securities are
touching circuit breaker and execute halt trade. This happens because of few number
of securities float in the market. The number of securities in DSE should also be
increased through new IPOs.

BSEC, DSE and other financial regulatory bodies must learn from UKLA and LSE to
stabilize capital market. They should make awareness program in order to attract
more investor in capital market and ensure strong control of compliance that restrain
from sudden share market crash.

33 | P a g e
 References:

Persons:

Md. Ahsanulllah, CEO, BD Finance Capital Holdings Ltd.

Mustofa Kamal, CEO, PFSL Investment Ltd.
Golam Sarwar Bhuiyan, CEO, AIBL Capital Ltd.
Reza Humayun Morshed Hayat, CEO, First Securities Services Limited

Annual Report:

Annual Report of Bangladesh Securities and Exchange Commission-2013.

Annual Report of Dhaka Stock Exchange Limited-2013.
Annual report of London Stock Exchange Limited-2013.

Books:

International capital Market-Law and Institutions by Cally Jordan, Jaffrey Golden

Foundations of Financial Markets and Institutions: Pearson New International Edition
4th Edition by Frank Fabozzi, Franco Modigliani, Frank Jones

Web Site:

www.wikipedia.com
www.google.com
www.londonstockexchange.com
www.dsebd.org
www.sec.gov.bd
www.ukla.org

-THE END-

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