The process of introducing derivatives as a new financial product in Bangladesh’s capital market has moved a step forward, with the Bangladesh Securities and Exchange Commission (BSEC) approving a roadmap submitted by the Dhaka Stock Exchange (DSE).
According to the roadmap, derivatives trading will initially begin with index futures. If all preparations are completed as scheduled, trading of the product could start on the DSE in January 2028.
The approval was given at the BSEC’s 1,027th commission meeting on Tuesday (September 1), chaired by Commission Chairman Masud Khan. The information was disclosed in a press release signed by BSEC Executive Director and spokesperson Md. Abul Kalam.
The DSE’s roadmap includes developing the necessary regulatory framework, upgrading trading systems, enhancing technological capacity and establishing the required infrastructure.
It also includes plans to develop clearing, settlement and risk-management frameworks for post-trading activities.
As derivatives trading is relatively complex and involves higher risks, the BSEC has stressed the need for strong technological capabilities and effective risk-management systems. Necessary infrastructure will also be developed to ensure smooth settlement of financial obligations and securities after trades are completed.
Alongside approving the DSE’s roadmap, the BSEC will regularly monitor its implementation. The commission will review whether the DSE is progressing with preparations according to the approved schedule.
The DSE plans to introduce index futures as the first derivatives product. These contracts are based on the expected future level of a specific stock market index.
The introduction of derivatives could provide investors with new investment and risk-management opportunities alongside conventional share trading.
Institutional and experienced investors, in particular, may use derivatives to manage risks arising from potential market fluctuations. The introduction of new financial products could also diversify the capital market and increase its depth.
However, market participants believe strong risk management, technological capacity and effective regulatory oversight will be essential for the successful development of the derivatives market.
