The securities regulator had been directly or indirectly involved in financial frauds that eroded investor confidence, crippling the market over a period of a decade and a half.
That has created a ground for an in-depth and impartial investigation into the role of the Bangladesh Securities and Exchange Commission (BSEC) in the decade until the ouster of the Sheikh Hasina-led government.
So, reforms should begin with the market regulator based on the probe findings.
"We suggest establishing a fact finding committee. This committee will dig up what the market experienced in the last 15 years and make public the lessons learnt," said Saiful Islam, president of the DSE Brokers Association.
The committee will also check what the regulator did and the market intermediaries did. "Everyone should come under scrutiny," added Mr Islam.
Despite repeated warnings from experts, the regulatory body had not acted seriously to stem stock price manipulation or keep weak businesses from being listed on the bourses.
The main objective of the stock market watchdog now should be to make visible changes to assure investors that the market is safe for investment.
The intermediaries -- merchant banks, asset management companies, issue managers, brokerage houses, and audit firms -- had been found involved again and again in money laundering and other financial scams.
Universal Financial Solution alone siphoned off Tk 2.3 billion. RACE Asset Management exploited the mutual fund industry to its advantage and in turn caused irreparable damages to the sector.
The BSEC has to ensure stringent punishment to those involved. It also has to make sure that investors cheated by brokerage firms get back their money.
The two former chiefs of the market watchdog have drawn flak for their failure to bring discipline to the market. There must be many corrupt officers at the lower tiers who not only refrained from taking actions against irregularities of market stakeholders but also facilitated them.
They should be held to account.
For example, the BSEC let Ring Shine Textiles Ltd to raise money from the market even after the Dhaka Stock Exchange pointed out flaws in its IPO proposal.
If the corrupt officials in the BSEC get away with their illegal acts and remain in the organisation, they may threaten the fruitful implementation of any reforms.
Sources said there were officials in the BSEC whom brokers could manage to avoid any scrutiny and that they should be subject to an investigation.
Mahmood Osman Imam, of the finance department of Dhaka University, said the regulator should make sure that the market behaves as it should be. Then only other things should be taken into consideration.
Ensuring Justice
Legal punishments should be meted out to the market intermediaries that tainted the image of the market through misappropriation of investors' money.
The Commission should form an inquiry committee and should investigate the processes through which weak companies came to the market. The legal and procedural loopholes should be plugged.
At least 30 to 40 per cent of the companies that listed in the 15 years have been showing poor financial performance because of their inherent weaknesses.
Moreover, investigations should be conducted to find out how companies like BEXIMCO were able to collect huge amounts of money through Sukuk bonds and other debt instruments.
Brokers, merchant banks, individuals, audit firms, issuers, and those inside the regulatory body involved in the launching of the investment instruments should be punished.
In enforcing reforms, experts say, the BSEC should allow the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE) to make decisions and work as the first line of defence against malpractices.
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