Experts and stakeholders have hailed the regulatory reforms brought in rules and the actions taken against the wrong doers to enhance good governance in the country's capital market.
Their evaluation came on completion of one year of the securities regulator's incumbent commission led by Prof. Shibli Rubayat Ul Islam.
"The incumbent commission's performance is better than the previous one. They did many good things to restore investors' confidence," said Faruq Ahmad Siddiqi, a former chairman of the Bangladesh Securities and Exchange Commission (BSEC).
The incumbent BSEC chairman Prof. Islam and three commissioners-Dr. Shaikh Shamsuddin Ahmed, Dr. Mizanur Rahman and Md. Abdul Halim- joined the securities regulator during May 17-20, 2020.
Under the leadership of Prof. Islam, the regulator took many initiatives including adopting the policy of clearing IPO (initial public offering) proposals within quickest possible time frame based on merits.
The BSEC has imposed large amounts of penalty on many manipulators along with restructuring the boards of many weak companies.
Besides, the commission has also compelled the sponsor-directors of the listed companies to comply with the rules of holding minimum two per cent shares.
Apart from this, the securities regulator has framed rules to create a market stabilisation fund worth Tk 210 billion. The fund will come from the listed companies' un-distributed dividends and unclaimed shares.
The former BSEC chairman Mr. Siddiqi, however, said the securities regulator should increase its control over the market manipulators.
"The regulator should not intervene in the market frequently. The market should be allowed to go forward as per its own strength," Mr. Siddiqi added.
To breathe life into the operations of weak companies, the BSEC restructured the boards of seven 'Z' category companies. The restructuring of the boards of three other companies is set to be completed soon.
Recently, the securities regulator has introduced the provision of allowing foreign companies as the sponsor of mutual funds (MFs) in a bid to make the funds' operations vibrant.
The president of Bangladesh Association of Publicly Listed Companies (BAPLC) Azam J Chowdhury said for the first time the capital market got an efficient commission comprising skilled persons.
"The commission led by Prof. Islam is working with innovative ideas which are being reflected in the capital market," Mr. Chowdhury said.
Ha said apart from bringing time befitting reforms, the commission is also working abroad as the ambassador of the country's economy to attract foreign investors.
"The good sign of the capital market is that the demand of quality shares is increasing day by day. The commission has also laid its efforts to breathe life into the operations of weak companies," Mr. Azam said while speaking on different reforms brought by the incumbent commission.
The BSEC has also instructed the merchant bankers to accelerate their efforts to make the share supply side stronger as the demand of the quality shares is increasing.
The vice president of Bangladesh Merchant Bankers Association (BMBA) Md. Moniruzzaman said one year time period is very small to bring significant development.
"Nevertheless, the governance level developed enough following some stern measures taken by the commission. The commission has also eased the IPO approval process," said Mr. Moniruzzaman.
The BSEC formulated rules for digital trading booths in home and abroad. The regulator has already two proposals of opening digital booths in Dubai and Toronto by UCB Capital Management and Padma Bank Securities respectively.
The securities regulator introduced the system of allocated IPO shares on pro-rata basis instead of lottery to encourage investors' participation in the capital market. The BSEC has also introduced the system of opening BO (beneficiary owner's) accounts online.
The president of the DSE Brokers Association of Bangladesh (DBA) Sharif Anwar Hossain said investors' confidence has restored to a large scale following the different initiatives taken by the commission.
"Stock brokers who earlier passed bad times are now in a comfortable situation as the turnover rose significantly in the market. The team work of the commission is market friendly," Hossain said.
Of other measures, the securities regulator has also introduced the mandatory provision of listing of the perpetual bonds so that investors are able to enhance liquidity through the participation of general investors.
Asked about his own evaluation, the BSEC chairman Prof. Islam said securities regulator has achieved around 25 per cent of its target within one year of taking charge despite the capital market was affected by the COVID-19 outbreak.
"Different types of manipulations and corruptions in managements in listed companies and market operators will be declined significantly if our target set for developing the IT infrastructure is achieved," Islam said.
He said foreign investors have already started investment in bonds and this trend is likely to continue in coming days.
"The commission is working relentlessly and the desired target of the market development can be achieved within next four years," Islam added.
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