The securities regulator on Tuesday sought necessary initiatives from the insurance regulator in facilitating the listing of 26 insurers as well as ensuring their stipulated investment in listed securities.
The Bangladesh Securities and Exchange Commission (BSEC) sought the initiatives through sending a letter to the Insurance Development and Regulatory Authority (IDRA) chairman.
"We are requesting you to take necessary initiatives to encourage the said insurance companies to file applications for initial public offering (IPO) as well as to invest at least 20 per cent of their respective equities in any of the stock exchanges," said the BSEC letter.
As per a revised provision of the public issue rules, the 26 insurers will have to invest at least 20 per cent of their respective equities in listed securities along with going public, raising a minimum capital of Tk 150 million each.
The BSEC sought the IDRA's support to enhance the role of institutional investors in the country's capital market, which is dominated by retailers.
On March 23, the securities regulator urged the banks to support the capital market by accelerating the formation of their special funds worth Tk 2.0 billion each.
The BSEC also urged the asset management companies (AMCs) to support the stock market by utilising liquid portion of their funds.
The securities regulator earlier exempted 26 insurers from the mandatory provision of raising a minimum capital of Tk 300 million through IPO under the fixed price method.
The BSEC offered the exemption in November 2020 following a proposal of the IDRA. The regulator made the proposal, as the 26 small-cap companies were not able to float 30 million shares maintaining joint shareholding rules.
As per the revised provision, the 26 insurance companies will have to raise at least Tk 150 million.
Besides, the securities regulator set a condition of investing at least 20 per cent of the companies' respective equities in listed securities.
"The companies will have to avail the scope of going public by investing at least 20 per cent of their respective equities in listed securities," said Mohammad Rezaul Karim, a BSEC executive director.
The securities regulator sent the letter to the IDRA to accelerate the listing of the 26 insurers along with ensuring their support for the stock market, he added.
In its letter, the BSEC said the 26 insurers have taken no initiative so far to file application for going public under the fixed price method. They are also not investing 20 per cent of their equity in any of the bourses.
"The insurers are expected to act as institutional investors and come up with innovative ideas for the sake of their business and the capital market development."
The BSEC expects support from the IDRA regarding the listing of the 26 insurers as well as ensuring their stipulated investment in listed securities, the letter noted.
Presently, there are 35 life and 46 non-life insurance companies - licensed by the IDRA. Of these 81 insurers, 53 are listed with the country's stock exchanges.
