B Mirror Report: Within a week of the newly elected government assuming office, extensive lobbying has begun to secure the top positions of the Bangladesh Securities and Exchange Commission (BSEC), the stock market regulator.

Market experts believe that after decades of fraud and self-serving policies that have inflicted deep wounds on the capital market, there is no alternative to strong and courageous leadership to restore stability.

Ahead of the election, the Bangladesh Nationalist Party (BNP) pledged in its manifesto to appoint qualified individuals to regulatory bodies. However, concerned stakeholders say it is essential to thoroughly examine whether potential candidates have any conflicts of interest or allegiance to particular groups before making appointments.

According to financial sector analysts, restoring investor confidence in the stock market requires BSEC to operate with full independence. In particular, it must be capable of making decisions free from political or business influence. Former BSEC Chairman Faruk Ahmed Siddiqui believes that maintaining distance from vested interest groups and market syndicates helps ensure transparency in regulatory operations. At the same time, newly appointed officials must be willing to listen to stakeholders and possess the skills necessary for effective market coordination.

Following the political changeover on August 5, 2024, the interim government appointed Khondoker Rashed Maqsood as Chairman of BSEC.

However, commission sources claim that Maqsood, a career banker, failed to gain the confidence of BSEC officials and staff. During his tenure, greater emphasis was placed on fines and policy reforms, but not a single IPO was approved.

Allegations also suggest that internal conflicts within BSEC, along with the placement of officials on OSD (officer on special duty) status or forced retirement, rendered the regulator largely ineffective.

Market insiders cite controversial actions by previous BSEC boards as lessons that must be learned. After the 2010–11 market crash, numerous weak companies were listed during the commission led by Professor M. Khairul Hossain, many of which later turned into “junk stocks.” Similarly, the commission headed by Professor Shibli Rubayat-Ul-Islam faced allegations of distorting the market through the imposition of floor prices and favoring specific groups or individuals. Reports also surfaced of business ties between his family members and market-related entities.

Under the current circumstances, investors and organizations such as the DSE Brokers Association (DBA) are calling for leadership capable of elevating Bangladesh’s stock market to international standards. Notably, during the BNP’s previous tenures in office from 1991–95 and 2001–06, the market did not witness any major scandals, raising expectations from the new government.

It now remains to be seen to whom the new administration will hand over the reins of the regulator in order to revive this fragile sector.