BSEC raises vigilance to foil manipulation

Mohammad Mufazzal | Published: February 04, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

The Bangladesh Securities and Exchange Commission (BSEC) has intensified its vigilance over the capital market activities in a bid to curb the possibility of manipulation by any quarter, officials said.
The securities regulator has taken the move, so that the market does not face any kind of extreme volatility, observed before the 2010-11 stock market debacle.
Since November last the listed securities on the premier bourse and the port city bourse have been observing a continuous rally other than some marginal corrections.
On November 3, 2013 the benchmark DSE index was at 3993.33 points, and on February 3 (Monday) it stood at 4826.51 points, marking a rise of 20.86 per cent or 833 points within three months.
The BSEC officials have ruled out the possibility of any extreme volatility amid continuous rally of stocks, as they remain alert to contain any manipulation.
"We are in favour of the capital market's natural movement on the basis of its own strength. That's why we will not intervene in its movement. But we have increased vigilance to curb any possible manipulation," BSEC Commissioner Professor Helal Uddin Nizami told the FE.
"But investors have the major responsibility to know about the securities before making their investment decision. We can assure them that nobody will be spared if s/he commits any wrongdoing."
According to him, the securities regulator has achieved controlling power over abnormal fund supply by bringing lenders under the purview of strict margin regulations.
"Now the manipulators will not be able to influence the market by taking margin loans beyond their specific limit. Secondly, the possibility of market manipulation has reduced due to conversion of omnibus accounts into separate BO (beneficiary owner's) accounts."
The commissioner said presently the securities regulator is more watchful than the stock exchanges. The BSEC's dependency on the exchanges has reduced after introduction of Instant Watch Surveillance Software.
"The BSEC has achieved the legal authority of seeking information from the banks and financial institutions. In future the commission can seek the authority of seeking information from the telecom companies for the sake of proper market monitoring," he further added.
The other senior BSEC officials have also stressed on routine inspection by the departments concerned to ensure transparency.
According to them, the market is observing a positive movement due to the government's regulatory reforms and various related steps. Â
Mohammad Saifur Rahman, BSEC executive director, has termed the prevailing market trend usual due to normalcy observed in the country's political arena.
"The market never remains stagnant. It is observing a continuous rise, as the investors' confidence level has increased. We see no abnormality here."
He also said the regulator is alert, so that the market does not face any extreme volatility.