BSEC to scrap prior approval rule for DSE inspections

Mohammad Mufazzal | Published: April 25, 2026 22:04:52

The securities regulator has agreed in principle to empower the Dhaka bourse to conduct instant inspections of issuer companies upon finding prima facie evidence of any wrongdoing.
The regulatory move came following a plea from the Dhaka Stock Exchange (DSE), against the backdrop of its inability to inspect companies even after signs of mismanagement, financial mismatches, or information from shareholders or insiders.
At a meeting last week, the Bangladesh Securities and Exchange Commission (BSEC) "agreed in principle" to remove the provision that requires the Dhaka bourse to obtain prior permission for inspections, said DSE Managing Director Nuzhat Amin.
Section 54(1) of the DSE's listing regulations reads: "The Exchange, on cause, may inspect at any time, if it is necessary to conduct an inspection for the interest of investors, the affairs of any issuer of listed securities with prior approval of the commission and shall report to the commission within fifteen days of completion of such inspection."
This means the existing provision does not allow the exchange to conduct inspections of listed companies without prior approval from the BSEC.
Ms Nuzhat said that initially the market watchdog would approve inspection proposals on an urgent basis. "Soon afterwards, the provision will be repealed empowering the exchange to carry out inspections at any time."
The regulator may issue a directive in this regard, added the DSE chief.
Despite the exchange being responsible for a company's listing, it is not allowed to inspect the issuer entity at its own discretion.
As part of its preparation, the DSE has also started developing a system to conduct inspections of issuer companies at any time following a change in the listing regulations. "Our preparation will be completed before the change in regulations. The DSE will notify the commission of every inspection in the listed companies."
The DSE, however, can inspect brokerage firms at any time under the existing rules without regulatory permission. The main hindrance to taking prompt action to stop scams by brokers is the prohibition on verifying clients' bank statements without their permission.
In many cases, rogue brokers have provided fake bank statements of clients after embezzling funds.
The DSE chief said the exchange should have the authority to verify bank statements of brokers' clients. "Permission from the central bank is required for the DSE to verify bank statements.
"We will urge the central bank to allow the exchange to verify bank statements," Ms Nuzhat said, adding that the prime bourse will have to install a system to ensure that the scope of verifying clients' bank statements is not misused.
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