Kathmandu:The insurance regulator of Bangladesh has made it mandatory for Insurers to get prior approval for IPOs issue before applying to the Stock exchange.
It has called on the stock market regulator not to approve any initial public offering (IPO) for insurers without a no-objection certificate (NOC) from it.
The move comes after the IPO approval granted in August to Sena Kalyan Insurance Company by the Bangladesh Securities and Exchange Commission (BSEC).
Insurance Development and Regulatory Authority (IDRA) has issued the NOC later only.
Under the IDRA Act 2010, promoters of an insurance company must hold a stake of 60% in the company. Only the remaining 40 percent shares can be floated in the market for public through IPOs.In January 2021, IDRA asked all the insurers to comply with the law to ensure that a stake of 60% is held by promoters alone. However, more than 80% of listed insurers are only complying with the BSEC’s requirement for a 2% shareholding by each promoter individually, and 30% shareholding by promoters and directors collectively.
Currently, there are 78 insurance companies including 32 life in Bangladesh. Only, 51 companies are listed on the stock exchanges.