The central bank and financial market regulator recommends that the owners of banks and insurers involved in merger and acquisition activity initiated in the period after April 1, 2022 weigh the listing of their institutions' shares on the local bourse.
In the recommendation, MNB designates as "good practice" the written commitment of local banks or insurers concurrent with an application for approval of M&A activity to list at least one series of ordinary shares on the BSE within two years after the clearance of the transaction.
The recommendation applies to M&A activity affecting at least 10% of voting rights of institutions with a market share of over 5%. It also applies to M&A transactions conducted by institutions with a market share exceeding 5% that boost that market share by more than 5%. The recommendation does not apply to M&A activity within corporate groups.
MNB expects free float of shares listed on the bourse as a result of the recommendation to reach at least 15%.
The central bank said the listing of more banks and insurers on the bourse and the compliance with the relevant disclosure rules would "further strengthen transparency and contribute to a higher degree of protection for depositors and small investors". Such listings could also result in "greater stress" on efficient business operation expected by owners, it added.
MNB noted that lenders' and insurers' presence on the local equities market is "extraordinarily low".
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