Corporate restructuring rules drafted to protect public interests

In a major policy shift to address a long-standing regulatory vacuum, the Bangladesh Securities and Exchange Commission (BSEC) has unveiled the draft Corporate Restructuring Rules, 2026. The framework transitions capital market governance from corporate autonomy under the Companies Act to structured regulatory oversight.
Historically, listed companies executed major overhauls-like mergers, amalgamations, and demergers-beyond the immediate reach of the securities regulator, frequently submitting documentation post-facto. According to BSEC officials, the new rules aim to curb systemic vulnerabilities and protect public assets by mitigating primary market risks.
The new rules target several malpractices that have long plagued the capital market. These include backdoor listing, where non-compliant or unlisted entities merge with listed companies to bypass standard IPO regulations; the extraction of profitable units or subsidiaries to the detriment of the public parent company's capital base; and the demerger of lucrative business segments without giving fair value to public shareholders.
Moreover, the implementation of the rules will ensure standardized technical scrutiny of asset valuations and exchange ratios before schemes reach public investors.
The draft rules introduce a rigorous chronological workflow ensuring that comprehensive regulatory review occurs prior to shareholder and judicial approval.
Board approval: The company's board approves the restructuring intent and formulates a detailed "Scheme of Arrangement."
Simultaneous submission: The board must immediately file the scheme with both the BSEC and the relevant stock exchange, providing comprehensive technical data on valuation methodologies.
Observation phase: The BSEC and the stock exchange conduct a technical evaluation and issue formal written "observations" regarding the transaction's fairness and public interest.
Extraordinary General Meeting (EGM): The board is legally mandated to present the regulators' formal observations out loud to the shareholders during the EGM. This ensures an "informed vote" before shareholders decide on the Special Resolution (requiring a 75 per cent majority threshold).
Judicial sanction: The scheme is submitted to the High Court for final legal sanction, with the BSEC's written observations attached to the petition to apprise the judiciary.
While the BSEC acknowledges it does not hold direct statutory power under the Companies Act to outright "block" a court-sanctioned merger, it exerts influence through two key mechanisms. First, formal observations create a moral obligation; if the regulator flags a scheme as predatory, it becomes legally and reputationally difficult for a court to sanction it. Second, under Rule 3, the commission reserves the locus standi to intervene directly as a formal party to the High Court proceedings. Furthermore, the BSEC maintains its gatekeeper function to restrict or suspend trading and listing-related benefits if a restructuring evades market regulations.
The BSEC seeks feedback, suggestions, or objections by June 6.
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