The Bangladesh Securities and Exchange Commission (BSEC) on Tuesday ordered trading settlements for companies in the junk stocks, or "Z" category, to be T+3 from Wednesday instead of T+9 at the country's bourses. The country’s prime bourse, Dhaka Stock Exchange, now trades 53 junk stocks. The securities regulator also ordered that the shares of a company will be traded under "Z" category if it fails to distribute cash dividend or hold AGM in two years. A company will be transferred to the "Z" category if its production remains closed for six months or more. The BSEC also said that a company having net operating loss or negative cash flow from operations for two consecutive years would also be transferred into the "Z" category. A listed company will also be transferred into the said category if its negative retained earnings crosses its paid-up capital.• As per BSEC’s new order, sponsors and directors holding shares of "Z" category companies will not be able to sell, transfer, hand over and/or pledge them. The companies, which have been in the "Z" category for two years, will have to reform their existing board of directors within the next 45 working days. If they fail to do so, those sponsors and directors will not remain as directors in those companies or in any other listed companies and capital market intermediaries. The stock market regulator will appoint special auditors and observers to ensure compliance and good governance. After the reformed board is put in place, if they too fail to improve the business within four consecutive years, then the stock exchanges will delist the companies.