The Bangladesh Securities and Exchange Commission (BSEC) has imposed an upper limit on the bidding process of institutional investors in the book building system, in order to check manipulation in the bidding process.Institutional investors can now bid only up to 20% higher or 1.2 times the fair value of primary shares, and there will be no lower limit for bidding.The securities regulator has issued a directive in this regard.As per the directive, the simple average of net asset value and the value obtained by the earnings yield method would be the fair value of the offered shares.To find out the value in the yield method, bidders have to divide a company's expected rate of earnings by its actual rate of earnings and then multiply the outcome by paid-up value.The normal rate of earnings will have to be at least 10% of the paid-up value.Meanwhile, to calculate the expected rate of earnings, bidders must divide the five-year average of profit after taxes by the paid-up share capital – including share premium – and then multiply the figure by 100.While calculating their net asset value, companies must exclude: fictitious assets, bad debts, preference shareholders' claims, and proposed dividends.Then whatever the fair value is, no bid can exceed the upper limit of 1.2 times.