Two and a half years following its inception, the Alternative Trading Board (ATB) of the Dhaka Stock Exchange (DSE), the primary stock market in the country, has struggled to meet its goals in attracting entrepreneurs. Market participants believe that the stringent regulations regarding share pricing and transaction limitations are the primary barriers. This has led to increasing frustration.

The ATB is primarily intended for trading shares of unlisted companies, bonds, sukuk, open-end mutual funds, and alternative investment funds. In this framework, companies are not permitted to raise capital by directly issuing shares to the public. Only current shareholders or sponsors are allowed to sell shares, limited to 49 percent of their paid-up capital.

The most significant challenge facing the ATB is the regulations governing share pricing. Under the current guidelines, no company is allowed to sell shares at a price exceeding 30 percent above its net asset value (NAV). Many companies view this regulation as ‘unjust’.

The Bangladesh Securities and Exchange Commission (BSEC) asserts that this cap is in place to safeguard investor interests and prevent market manipulation. However, in practice, numerous private companies have managed to sell their shares at prices significantly above the NAV.

Demand is constrained due to the limited availability of shares on the ATB. The trading volume in listed securities is quite low, leading to a liquidity crisis that deters investors. In the past, if a profit was realized within three months of purchasing shares on the ATB, the funds would be allocated to the Investment Protection Fund. Although this regulation was abolished in May 2024, daily trading frequently falls below Tk 1 million, with numerous days experiencing no trading activity.

A significant factor contributing to the ATB’s lack of popularity is insufficient promotion. Market participants believe that if the DSE and BSEC had undertaken a substantial initiative, the ATB could have gained greater recognition among entrepreneurs. Many successful entrepreneurs remain unaware of this platform.

While companies listed on the ATB are not mandated to provide quarterly financial reports or maintain robust corporate governance, it can still serve as a viable platform for small and promising enterprises. Experts suggest that if the ATB is revitalized, it could become an effective investment and exit strategy for angel investors and startups.