The government has announced an ambitious plan to modernise Bangladesh’s capital market by gradually transitioning the stock market settlement cycle from the current T+2 system to a same-day (T+0) settlement.
Unveiled in the proposed FY2026-27 budget, the reform aims to allow investors to receive shares and funds on the same day a trade is executed. The move is part of a broader package intended to deepen the market, improve operational efficiency, and restore investor confidence.
Under the existing T+2 framework, transactions are settled two business days after a trade. The shift to T+0 is expected to bring the country closer to global best practices while significantly reducing the waiting period for cash and securities.
Saiful Islam, president of the DSE Brokers Association of Bangladesh (DBA), welcomed the proposal, noting it reflects a long-standing demand for a more efficient trading environment.
However, he cautioned that the transition would necessitate significant structural and technological upgrades across market infrastructure, including brokers, banks, clearing systems, and the central depository.
While experts agree that faster settlement improves efficiency, they noted it may not automatically draw foreign capital. One expert emphasised that international investors remain primarily concerned with market stability, fair valuation, and transparent price discovery.
Digital reforms and IPO automation
The government is also seeking to position the capital market as a primary alternative to the banking sector for business and infrastructure financing.
To facilitate this, plans are underway to digitise the entire Initial Public Offering (IPO) process, covering online applications, document verification, fee payments, and regulatory approvals.
An integrated digital platform will be established to connect issuing companies, issue managers, stock exchanges, the Central Depository Bangladesh Limited (CDBL), and regulators to ensure faster information exchange.
Institutional investment and governance
The budget outlines further measures to attract long-term institutional investors, such as pension funds, insurance companies, Asset Management Companies (AMCs), and mutual funds. There are also plans to expand the corporate bond market and introduce municipal bonds for urban infrastructure projects.
To improve governance, the government will introduce professional liability frameworks and insurance requirements for auditors, valuers, and issue managers.
Additionally, foreign investors are set to benefit from simplified repatriation procedures. Profits and proceeds from securities purchased through Non-Resident Investors’ Taka Accounts will be eligible for repatriation or reinvestment within one working day.
