Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan has announced that brokerage houses will no longer handle investors’ signature processes as part of a broader initiative to curb irregularities and restore confidence in the capital market.

Speaking as the chief guest at a shadow parliament titled “Measures to Restore Confidence in the Capital Market” at the Bangladesh Film Development Corporation (BFDC) in Dhaka on Saturday, Khan said the signature process would be fully digitized to prevent manipulation of investor information.

He said the Dhaka Stock Exchange (DSE) is developing a dedicated back-office software system that will prevent brokerage firms from altering clients’ information, even if they attempt to do so.

Khan also announced that the DSE’s surveillance department will be upgraded to an artificial intelligence (AI)-based system within the next year. Under the new system, trading in any stock showing abnormal price movements will be automatically suspended, making it more difficult for market manipulators to influence weak stocks.

“We believe the measures we are taking will help the market recover. Oversight of brokerage houses will also be strengthened significantly, and confidence in the market will return,” he said.

Addressing concerns over investor behavior, the BSEC chief said retail investors have become the dominant participants in Bangladesh’s capital market over the past four decades, but many lack sufficient market knowledge. He noted that many invest based on rumors or others’ advice and frequently suffer losses by buying fundamentally weak stocks in hopes of making quick profits.

Khan stressed the need to expand the role of mutual funds to guide investors toward more informed investment decisions. Referring to India’s capital market, he said mutual funds account for a significant share of market capitalization and Bangladesh should place greater emphasis on developing the sector.

The BSEC chairman also said the regulator is reviewing the margin rules introduced last year, acknowledging that they discouraged many investors. He said the commission has already initiated steps to reform those regulations to better support market development.

The event was chaired by Hasan Ahmed Chowdhury, Chairman of Debate for Democracy.