In a bid to streamline the resolution of disputes in the capital market and reduce the volume of investor complaints against stock brokers and listed companies, the Bangladesh Securities and Exchange Commission (BSEC) has approved two dispute settlement regulations for the country's two stock exchanges.
At a meeting held on Tuesday, the BSEC gave the green light to the Dhaka Stock Exchange (Settlement of Dispute) Regulations, 2025 and the Chittagong Stock Exchange (Settlement of Dispute) Regulations, 2025.
Exchange officials said the formulation of such dispute settlement mechanisms had been pending since 2019. The regulations will come into effect following publication in the official gazette.
Under the new rules, each stock exchange will form a panel of arbitrators and appoint a registrar -- an official of deputy general manager (DGM) rank or higher -- from the exchange's regulatory affairs division to handle dispute resolution.
The panel of arbitrators will comprise retired judges and individuals with a legal background and capital market expertise.
Investors will be able to submit complaints through prescribed forms to the registrar, who will then summon both parties -- the complainant and the respondent, who may be a stock broker or issuer company -- to resolve the dispute through mediation.
If mediation fails, the dispute will be placed before the arbitrators. In such cases, both parties will choose arbitrators from the approved panel. Judgments will be delivered based on hearings and documentation, in the presence of witnesses.
The arbitrators may deliver a unanimous judgment. In case of any dissent, the majority decision of the arbitrators will be deemed final.
Importantly, any party -- whether the investor, stock broker, or issuer company -- will have the right to appeal to the BSEC or seek legal redress through the courts.
Talking to the FE, BSEC spokesperson Md. Abul Kalam said the introduction of arbitration panel would help reduce the volume of investors' complaints at the initial stages.
The regulator often has to investigate and conduct hearings on numerous complaints. Many of these can be resolved directly through exchange-level mediation or arbitration, he noted.
Mr Kalam pointed out that a significant number of complaints -- such as the misappropriation of investor funds by non-compliant brokers -- could have been settled earlier if dispute resolution mechanisms were already in place.
The Securities and Exchange Ordinance, 1969 also contains provisions allowing the stock exchanges to formulate regulations for the settlement of disputes.
"Therefore, the judgments delivered by the exchanges' panel of arbitrators will have a strong legal foundation," added Kalam.
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