The Bangladesh Securities and Exchange Commission (BSEC) aims to introduce financial derivatives in the country’s capital market by 2028, with index futures set to be the first product.

BSEC Commissioner Md Nafiz Al Tarak disclosed the plan at a stakeholder awareness and consultation programme on introducing financial derivatives on an exchange-traded platform, organised by the Dhaka Stock Exchange (DSE) on Monday (September 7).

He said the commission is positive about introducing derivatives but stressed that the market must have adequate infrastructure and risk-management mechanisms before the products are launched.

“Introducing derivatives without proper preparation could create additional risks in the market,” he said.

Nafiz said a time-bound roadmap has been adopted to amend existing regulations, operationalise the Central Counterparty (CCP) system and strengthen the technological and institutional capacity of Central Counterparty Bangladesh Limited (CCBL).

He added that brokers, traders and other market participants would also need to develop the necessary expertise to handle derivatives.

According to the commissioner, futures markets can help investors manage portfolio risks and hedge against market volatility while also contributing to greater market liquidity.

DSE Managing Director Nuzhat Anwar said the exchange and the BSEC had jointly prepared a roadmap for introducing new financial products. The initiative will be taken forward gradually based on feedback from market participants.

BSEC Executive Director Md Abul Kalam said index derivatives, particularly those settled in cash, could be introduced relatively easily. He said the regulatory framework would be updated and systems such as real-time margining, position monitoring and mark-to-market would be put in place.

DSE General Manager of the Market Development Division, Saiyid Mahmud Zubayer, said the exchange plans to launch derivatives in January 2028.

Under the phased plan, DSE will initially introduce its own index-based stock index futures, followed by single-stock deliverable futures and, in the longer term, options.

The consultation programme was attended by representatives of leading brokerage firms, merchant banks, asset management companies and other market stakeholders. It focused on the prospects and challenges of introducing derivatives in Bangladesh.