The Bangladesh Securities and Exchange Commission (BSEC) will allow day trading in selected blue-chip stocks and let eligible private companies list by floating just 10 per cent of their shares under a sweeping reform package that also eases initial public offering (IPO), margin lending and mutual fund rules.
BSEC Chairman Masud Khan announced the reforms on Thursday at a discussion organised by the Capital Market Journalists’ Forum (CMJF), saying the measures would be rolled out over the coming months.
The proposed amendments to the Direct Listing Rules, expected within three months, would extend the facility beyond state-owned enterprises, which currently must float at least 25 per cent of their shares. Eligible private companies would be able to list by offloading only 10 per cent.
Khan said the IPO process was too lengthy and cumbersome, requiring companies to submit extensive documentation and wait one-and-a-half to two years for approval.
“As a result, many good companies choose bank financing instead of raising funds from the capital market,” he said.
The commission will simplify the Public Issue Rules while maintaining regulatory oversight and meet market stakeholders next week to finalise the changes.
A draft of the revised margin lending rules will be released next week before taking effect after publication in the official gazette. BSEC is also revising the Mutual Fund Rules to strengthen institutional participation and plans to introduce a certification system for financial advisers.
The regulator plans to introduce day trading for fundamentally strong stocks, initially covering about 30 companies following proposals from brokerage firms. Working with Bangladesh Bank, it also aims to shorten the settlement cycle from T+2 to T+1, allowing investors to sell shares the day after purchase.
BSEC has already delegated greater authority to the Dhaka Stock Exchange (DSE) to act against abnormal price movements and suspected market manipulation without prior approval. The exchange has also been authorised to determine circuit breakers.
Within a year, the regulator plans to introduce an artificial intelligence-powered market surveillance system to detect manipulation more quickly.
It is also considering suspending trading in companies that have remained non-operational for prolonged periods, with the measure to be implemented gradually rather than through immediate delisting.
The commission is preparing legal reforms to strengthen enforcement against market abuse.
“The previous commission imposed Tk1,500 crore in fines, but only Tk33 lakh could be recovered because of legal complications,” Khan said.
BSEC is seeking dedicated High Court benches for capital market cases and legal changes allowing it to file cases directly with the Capital Market Tribunal. It is also considering criminal, rather than civil, proceedings in cases involving market manipulation, corruption and other serious violations.
To deepen the debt market, the regulator plans to allow bonds to be listed on the main board instead of the Alternative Trading Board and launch a derivatives market.
Khan said discussions with the finance ministry on reducing taxes on dividend income, easing restrictions on mutual fund investments and exempting zero-coupon bonds from tax had been encouraging.
Responding to questions on recent layoffs at the DSE, he said staffing decisions were an internal matter for the exchange, while issues involving dismissed BSEC employees would be resolved this month.
Khan said he had initially been reluctant to lead the regulator because of its troubled reputation but accepted the role after the government assured him of full operational independence.
The discussion was chaired by CMJF President Monir Hossain and moderated by General Secretary Ahsan Habib Russell.
