BSEC to Change Rules Against Insider Trading, Expand Scope of Disclosure Obligations

The BSEC (Bangladesh Securities and Exchange Commission) has issued a consultation proposing changes to its rules prohibiting insider trading.

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The consultation proposes to require all listed companies to disclose all loan activities as "price sensitive information", the definition of which is being expanded to refer to any information that might affect share prices or asset valuations of listed companies.

Under the proposals, listed firms would have to disclose information about any local and foreign loan or investment agreement, loan disbursements and receivables, asset mortgages, and failure to repay any loan or liability to a bank, creditor or LC recipient within three months.

Listed companies will also have to publicly disclose information on inter-company loan payments, including lending between subsidiaries and associate companies and loans to directors. Currently, such information is not required to be disclosed publicly.

In addition, the proposed rules will require listed companies to disclose information about acquisitions of any assets worth more than 5 percent of existing assets. Proposals relating to company ownership changes, capital reorganisation and decisions to buy or sell permanent assets must be made public immediately, among other material information.

Contracts with related parties, technology changes and changes in chief executives, company secretaries, board of directors, auditors and credit rating agencies must also be published as price sensitive information.

Listed companies and asset managers will be required to preserve price sensitive and material information on their websites for three years.