The Bangladesh Securities and Exchange Commission (BSEC) is working to introduce direct listing and bring the Dhaka Stock Exchange (DSE), Chittagong Stock Exchange (CSE), Central Depository Bangladesh Limited (CDBL) and Central Counterparty Bangladesh Limited (CCBL) under the initiative, BSEC Chairman Masud Khan has said.
He made the remarks at an open discussion titled “Current State of Bangladesh’s Capital Market, Existing Challenges and Future Course of Action” at the DSE Tower in Nikunja-2, Dhaka, on Monday. The DSE Brokers Association of Bangladesh (DBA) organised the event.
Masud Khan said several initiatives have been taken to bring quality companies to the capital market, introduce direct listing and modernise trading, clearing and settlement systems.
He said a framework for direct listing is being developed, while initiatives have also been taken to bring DSE, CSE, CDBL and CCBL into the direct-listing process.
The BSEC chairman expressed hope that visible progress on these initiatives would be seen within the next few months.
He also said the commission is working on a hybrid system that would allow companies to raise fresh capital while existing shareholders sell part of their holdings. Under the proposed arrangement, if a company offers 10% of its total capital to the market, part could be issued as new shares and the rest could come from existing shareholders.
The commission expects to introduce new IPO rules within a month, he added.
CCBL board may be restructured within a month. Masud Khan said the CCBL board could be restructured within the next month, paving the way for the institution to become fully operational.
He stressed that a central counterparty system is essential for managing trading risks and strengthening clearing and settlement in a modern capital market.
The BSEC is also working to introduce T+1 settlement, under which trades would be settled one business day after execution.
Masud Khan said discussions have been held with the DSE, CSE, CDBL and foreign banks, and a roadmap has recently been prepared. The commission aims to introduce T+1 by the end of this year.
Work on script netting is also progressing, he said, adding that technology-based automation is needed in areas such as margin lending, clearing, CCP operations and settlement.
The BSEC chairman said the commission would not intervene in the day-to-day movement of the market.
He said the market would be allowed to operate according to its own dynamics, while the regulator would investigate unusual trading or price movements and take action against irregularities.
He also stressed the importance of listing quality companies, saying their presence would help restore investor confidence.
Derivatives market and bond market The commission is working with the CSE to launch a derivatives market, Masud Khan said. Necessary approvals, broker registration, clearing arrangements and technological infrastructure are being addressed.
He also expressed optimism about expanding the bond market by bringing more bonds to the main market, creating new investment opportunities for institutional investors, including mutual funds and merchant banks.
The BSEC chairman further said risk-based surprise inspections of brokerage houses would continue to detect attempts to manipulate the market.
He also highlighted efforts to restore foreign investors’ confidence in Bangladesh’s capital market, particularly by addressing issues related to international indices such as MSCI.
Masud Khan said stronger market institutions, effective regulatory compliance and improved infrastructure would be essential to building a more credible and investor-friendly capital market.
