2024-09-16 08:22:35
DSE Brokers Association of Bangladesh (DBA) recommended several issues including the formation of a task force for the development and development of the capital market. Besides, the organization has called the financial adviser for a discussion meeting on the capital market.
On Sunday (September 15), finance adviser to the Ministry of Finance. A letter signed by DBA President Saiful Islam has been submitted to Salehuddin Ahmed.
DBA Secretary. This information was informed in a press release signed by Didarul Gani.
According to the circular, Dhaka Stock Exchange (DSE) has been operating in the capital market for nearly 70 years, while Bangladesh Securities and Exchange Commission (BSEC) was established in 1992-1993 and has been the main regulatory body in the same sector for over 30 years. is going Considering the creation, mission, tenure, tradition and role of these two organizations, ‘Bangladesh Capital Market’ is far from a source of capital formation and a sector of employment creation. The sad thing is that even after this long time, our capital market has not yet developed as an industry, business sector and a general sustainable income sector.
The letter also mentions that the interim government has constituted several task forces for reforms in banking, economy, constitution etc. sectors. We hope that you will soon consider setting up a task force for reforming the capital market sector in order to develop and progress a large sector like the capital market following the goals and objectives of the interim government.
The Finance Adviser is requested to kindly consider the several recommendations made by the DBA for reforming the capital market sector.
DBA’s recommendations are:
BSEC has not succeeded in facilitating the development of the country’s industry and trade by developing the capital market sector. Our market is fully equity driven. We have no other products in the market except equity. Although the bond market has been discussed for the past 20 years, nothing effective has been done to develop it. It is a recognized approach of international standards that our BSEC is engaged in product development development, rulemaking as well as investigation of top level deviations, criminal activities, insider trading and enforcement to benefit the capital markets.
The model of capital market regulators in the developed world shows that they are liberal in formulating rules, but strict in application and implementation. This model is common and established in the capital markets of the developed world and can be considered for our capital market sector. Following this model they have established a Self-Regulatory Organization (SRO) under the SEC, which acts as a co-ordinator of all market intermediaries and takes disciplinary action against wrongdoers from the front line of self-regulators and facilitators and high-level wrongdoing and criminal activity. Actions are referred to the main regulatory agency by the SEC for legal action.
This model sets the capital market strategy for the next 5-10 years for the capital market regulator and focuses on product development accordingly.
Some chronic old issues are hindering our market growth. Such as untimely and outdated margin account policies, investor-adverse mutual fund management, rational pricing of IPOs and any aspect of products in private equity, venture capital, derivatives, options, futures, bond trading, mortgage-backed securitization, etc. – Absence of guidance.
Product development in the capital market is vital and essential for financing large infrastructure projects of the government. We should work to convert ‘savings into investment’ for locals and NRBs.