The country's main regulatory bodies for financial sector, capital market, insurance business and registration of companies, have agreed to take concerted action to help stabilise the situation in both financial and capital markets, through their efforts to ensure stability by strengthening their respective supervision. The decision came at a joint review meeting of the watchdogs - the Bangladesh Bank (BB), the Securities and Exchange Commission (SEC), the Registrar of Joint Stock Companies and Firms (RJSC) and the Insurance Development and Regulatory Authority (IDRA) - held at the central bank Thursday. Presided over by BB Governor Dr. Atiur Rahman, the meeting was attended, among others, by SEC Chairman Mr. M Khairul Hossain and high officials of the concerned watchdogs. The watchdogs also identified that accounting jugglery was one of the key reasons for the bubble in the capital market in 2010. "We've agreed to follow the international financial reporting system for preventing any jugglery of accounts of the listed companies," Executive Director of the BB, Mr. SK Sur Chowdhury told the FE. He also said the government has completed the work for enacting a new law on a financial reporting system to ensure transparency and accountability in the financial sector, insurance business and capital market. The IDRA has agreed to appoint external auditors for auditing of the insurance companies, Mr. Sur said, adding that it would help to ensure financial discipline in the insurance sector. The meeting discussed the overall liquidity situation in the market, while making recommendation for the insurance companies, particularly those in life insurance business, to play a vital role to help ease the liquidity pressures on the market through purchasing government bonds from the secondary market. "The IDRA will take necessary measures in this connection," the BB executive director said. The watchdogs are going to take decision for exchanging information among them, he added. Regarding investment in government bonds, BB Executive Director Mr M Jahangir Alam told reporters that the secondary securities market would become vibrant if the insurance companies move forward to invest their funds in the government bonds. Currently, four government bonds - five-year, 10-year, 15-year and 20-year - are being traded in the market. About multi-level marketing companies, Mr. Jahangir said the meeting has agreed that the RJSC would take all precautionary measures, before issuing any fresh licence for operating such companies. "The RJSC will take precautionary measures for issuing licences for the marketing companies to protect the people against deception," he said. The ministry of commerce is now working to legislate an act for monitoring such marketing companies, he added. Under the decision taken at the meeting, the central bank will provide technical support to the SEC to ensure effective supervision of the brokerage houses and merchant banks. "We've agreed to provide technical support to the SEC for carrying out its supervision over the brokerage houses and merchant banks," Mr. Jahangir added. Currently, 27 commercial banks, out of a total of 47, are running 35 brokerage houses and merchant banks as their subsidiary companies. "It has been a meeting for forging effective and all-out coordination among all related watchdogs for a better functioning of both the financial sector and capital market," SEC Member Mr Helal Uddin Nizami said. Such a coordination meeting was held after nearly two years, he stated. He also said a high-powered taskforce will be formed shortly to monitor the activities of the country's capital market. BSS adds: The regulators decided at the meeting that they would meet at least once in every three months to review the situation in the stock and money markets and to take further coordinated measures to protect people from jitters in the markets. Earlier in the morning of the day, the SEC held a meeting with different stakeholders in the stock market to discuss possible amendments to the Securities Act 1969. Terming Thursday's meeting with BB as very significant, SEC member Mr Helaluddin Nizami said unfortunately there was no such meeting in the past one and a half years, resulting in some policy mismatch in stock and money markets. BB Executive Director Mr Jahangir Alam said the central bank and the SEC would also form a joint inspection committee for ensuring transparency in the market. He said the meeting also agreed on strengthening the country's bond market which is still very small compared to the size of the capital market.
© 2025 - All Rights with The Financial Express
