BANGLADESH Law and Practice Contributed by: Nasirud Doulah and Amina Khatoon, Doulah & Doulah
5. Negotiation Phase 5.1 Requirement to Disclose a Deal
or bylaws; the disclosure requirement stated in 4.2 Material Shareholding Disclosure Threshold must be adhered to. The major hurdle to stakebuilding is that approval from BSEC is needed to implement any deal, which may result in reducing the shares held by the sponsors of the directors of the issuer below 30% or the acquisition of locked-in shares, as required for post-initial public offer (IPO) lock-in. 4.4 Dealings in Derivatives In Bangladesh, derivatives and hedging are currently allowed only for genuine business needs and can - not be used for speculative purposes. However, only banks can participate in derivative transactions to profit from such business. Such products include raw material and commodity derivatives, foreign cur - rency options, forward rate agreements and interest rate swaps. Private companies must avail these facili - ties through a scheduled bank licensed by the Central Bank of Bangladesh. Although the Bangladesh Securities and Exchange Commission (Exchange Traded Derivatives) Rules, 2019, have already been enacted, trading of deriva - tives through stock exchanges has not yet been for - malised in Bangladesh. Short sales and/or blank sales effected to manipulate the price of listed securities or Banks are required to submit prescribed reports and related statements to the central bank in respect of their and their clients’ derivative transactions from time to time, including disclosing the risks, losses and profit variations of their derivative business, as well as any extraordinary situations, in accordance with the financial disclosure requirements in force. 4.6 Transparency Currently, there is no express requirement that share - holders disclose their intentions regarding control of the company, but the purpose of the acquisition must be disclosed in the public announcement if it triggers substantial acquisition rules. derivative contracts are also prohibited. 4.5 Filing/Reporting Obligations
Non-listed companies are not subject to disclo - sure requirements except under antitrust laws or in a court/tribunal-approved scheme of arrangement/ merger/amalgamation, in which case such disclosures become mandatory to the tribunal and to members and creditors for the approval of such scheme. For listed companies, the disclosure mandate is based on the principle of materiality as outlined in the BSEC (Prohibition of Insider Trading) Rules, 2022. The company’s board is required to frame a policy for determining materiality in accordance with the criteria and guidelines prescribed by the BSEC and to make it available online. In addition, the following events are required to be disclosed by the company within 2 hours from the occurrence of the event: • price sensitive information: (a) report in respect of the financial position, finan - cial performance or any basic information in respect thereof; (b) information relating to dividends and corporate declarations; (c) information relating to changes in corporate structure (namely, merger, demerger, acquisi - tion, disposal, conversion or transfer); (d) information regarding changes in capital struc - ture; (e) information regarding expansion of business activities, changes, etc; (f) any other rules or regulations, orders, instruc - tions or circular/notification prescribed as price sensitive information (PSI) made, approved, or issued by the Commission; (g) any other information determined by the Com- mission by notification published in the Official Gazette from time to time; (h) disclosure of modification opinion and empha - sis of matters (if any) in the auditor’s report of audited financial statements shall be dissemi - nated as PSI; and (i) credit rating result shall be disseminated as PSI; and • material information:
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