A number of regulatory measures are underway to enhance investors' participation and the depth of the stock market along with ensuring its sustainable development in the long run.
The opening of digital trading booth in home and abroad is a matter of time now as the Bangladesh Securities and Exchange Commission (BSEC) has almost finalized the draft rules in this regard.
"The commission will approve the rules for digital booth at any meeting. A stock broker has already applied to us seeking approval of opening foreign trading outlet," said the BSEC commissioner Dr. Shaikh Shamsuddin Ahmed.
After the regulatory approval to the rules of digital outlet, stock brokers will be able to open trading booths at different areas of the country and abroad.
Apart from allowing digital trading booth, the securities regulator is working for long term capacity building in areas of human capital, modern technologies and prudential regulations.
Framing a new organogram of the securities regulator is also in progress to enhance manpower in the securities regulator.
The BSEC officials said they are working to ratify the laws and regulations for the securities regulator, issuers and other stakeholders of the capital market to enhance their capacity building.
Meanwhile, the Financial Institutions Division (FID) of the ministry of finance (MoF) has drafted an act accommodating the Securities and Exchange Ordinance, 1969 and the Bangladesh Securities and Exchange Commission Act, 1993.
The BSEC officials said they are working with the stock exchanges and other stakeholders to ensure a good governed primary market for the sake of long term investments.
Taking into account the margin loan dependent capital observed in 2010, the BSEC wants the enforcement of margin rules without 'fear and favour'.
The securities regulator has also laid emphasis on a digital platform to ensure real time functioning of the stock exchanges and other market intermediaries.
Meanwhile, the BSEC has floated tenders seeking consultants who will prepare road maps for technical innovation of the securities regulator and Investment Corporation of Bangladesh (ICB).
The securities regulator has also ordered the Dhaka Stock Exchange (DSE) to upgrade its website through efficient manpower.
The diversification of the country's capital market is another priority area of the securities regulator. The BSEC has also laid importance on introduction of derivatives, futures and options.
Another BSEC commission Prof. Md. Mizanur Rahman recently told a recent webinar that the bubble of 2010 could have averted if investors' portfolios were diversified.
He also said households, individuals and savers should invest in mutual funds (MFs) managed by professional fund managers.
"But the mutual funds in Bangladesh are far from standards despite such funds play a pivotal role in emerging economies," another BSEC commissioner Prof. Md. Mizanur Rahman recently said in his keynote speech presented at a webinar.
He said the commission is deeply engaged with the fund managers to ratify the rules of mutual funds so that the reporting areas of the fund managers are expanded to restore investors' confidence to the funds.
"The objective of ratifying rules of mutual funds is to ensure accountability in management of mutual fund for the sake of sustainable returns to the unit holders."
BSEC officials said surveillance of the capital market will be strengthened to prevent manipulative transactions for the sake of ensuring transparency in the capital market.
The securities regulator is strictly monitoring the companies' compliance with corporate governance codes and financial reporting and disclosure rules.
Many companies and individuals have already been fined for non-compliances regarding disclosures of selling shares and publishing quarterly and annual reports.
The BSEC officials said monetary policies, interest rates, and tax policies directly affect corporate cash flows in the securities market.
That's why, the securities regulator seeks prudent measures in monetary policies, taxation so that the country's capital market remains unaffected.
The securities regulator also wants proper coordination among different regulators such as Bangladesh Bank, National Board of Revenue (NBR) so that the capital market is not affected by any decision taken by other regulators.
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