2024-10-08 06:24:56
Bangladesh Securities and Exchange Commission (BSEC) has formed a special capital market reform task force with the aim of overall development of the capital market of Bangladesh, increasing investor confidence and ensuring good governance of international standards.
This task force has been formed by the order signed by BSEC Chairman Khandkar Rashed Maqsood on Monday (October 7). BSEC executive director and spokesperson Mohammad Rezaul Karim confirmed this information.
The members of the task force formed on capital market reform are – Professor of Economics Department of Dhaka University. Mohammad Helal Uddin, Former Managing Director of Dhaka Stock Exchange PLC KAM Majedur Rahman, Senior Partner of Huda Vasi Chowdhury & Co. AFM Nesar Uddin, Professor of CSE Department of Bangladesh University of Engineering. Md. Mostafa Akbar and Associate Professor Al-Amin of Dhaka University Accounting Information System Department.
The task force will start operations immediately. They will hand over the prepared report (reviewing the existing structure and proposing necessary amendments, providing recommendations for the promotion of international standards in applicable cases) to the Bangladesh Securities and Exchange Commission in a reasonable time after considering the views of all concerned parties. The office of the Task Force will be determined by the Bangladesh Securities and Exchange Commission based on the recommendations of the Task Force.
Bangladesh Securities and Exchange Commission and all institutions related to the capital market, such as: DSE, CSE, CDBL, CCBL, including market intermediary institutions and other parties will provide all kinds of cooperation including providing necessary information and data as per the demand of the task force.
Later, the Commission may include appropriate persons as members of the Task Force if necessary. Bangladesh Securities and Exchange Commission will provide secretarial support to this task force.
There will be various issue-based focus groups under the task force. Each focus group will work on specific issues and make recommendations to the task force on related issues.
Note that the Task Force will constitute a focus group consisting of appropriate person or persons after informing the Commission.
Composition of the Task Force:
For the overall development of the capital market of Bangladesh, to increase the confidence of investors, to raise the capital market to an international level, experts related to the capital market, organizations of various institutions of the participants of the capital market DBA, BMBA, ACRAB, BAPLC, economists, professionals (Chartered Accountant, Cost and Management Accountant, Chartered Secretary etc.), BSEC constituted ‘Capital Market Reforms Task Force’ based on well thought out views and recommendations of investors etc. This task force will analyze the major aspects of the market and formulate recommendations for planning and implementing necessary reforms. This task force is essential to meet the current market challenges and build a sustainable capital market.
The task force has been constituted with the experienced members of skilled capital market experts and analysts, economists, academicians, auditors, technicians etc. in the respective fields. Later, the commission can change the size and scope of the task force according to needs. The focus groups formed under the task force will include capital market experts and consultants, representatives of regulatory agencies, skilled professionals from market intermediaries, academics, journalists, analysts and other relevant stakeholders as members.
Scope of Task Force:
The main responsibility of this task force will be to carry out the following activities to ensure the development and good governance of the capital market.
The government’s financial sector policy proposal for transition identifies the main reasons for the low size of Bangladesh’s capital market and the ratio of ‘GDP to market capitalization’.
To make recommendations to ensure appropriate representation of the Commission in formulating the government’s financial policy and making policy decisions for financing from the capital market instead of bank loans for long-term financing.
Analyzing the current situation and major challenges of the capital market and formulating recommendations for solutions in order to promote the good governance of the capital market according to international standards.
Strengthening the institutional capacity of BSEC, internal governance, application of technology and automation in internal operations, taking effective measures to protect the privacy of information, recommending an administrative structure consistent with other developed and developing countries’ capital market regulatory bodies to increase the capacity of Bangladesh Securities and Exchange Commission as a statutory body, human resources Providing recommendations on necessary training, education, seminars, workshops and other internal matters in order to enhance the skills, develop the skills of the Commission officials and align them with international standards.
Making recommendations to modernize the supervision activities of DSE, CSE, CDBL, CCBL with the aim of ensuring transparency, accountability and institutional good governance of the said institutions.
Formulation of recommendations for updating the Securities and Exchange Commission (Issue of Capital) Rules, 2001 regarding issue of equity securities by way of private placement/offer.
Formulation of necessary policies for transparency, accountability, corporate governance, corporate disclosure, corporate governance including ensuring accuracy of audited financial reports, investor protection and market deepening of listed companies.
Liability of other parties including Issuer Company, Issue Manager and Underwriter (Merchant Banker), Delaware and Auditors, etc. – Making recommendations on liability and specific penalties.
In order to ensure the transparency, accountability and good institutional governance of market intermediaries, related regulations such as: Securities and Exchange Commission (Merchant Bankers and Portfolio Managers) Regulations 1996, Securities and Exchange Commission (Stock-Dealers, Stock-Brokers and Authorized Representatives) Regulations 2000, Formulation of recommendations to modernize the relevant rules including the Securities and Exchange Commission (Mutual Fund) Rules 2001.
Rules related to issue of debt and equity securities, such as: Bangladesh Securities and Exchange Commission (Public Issue) Rules 2015, Securities and Exchange Commission (Right Issue) Rules 2006, Bangladesh Securities and Exchange Commission (Debt Securities) Rules 2021, Bangladesh Securities and Exchange Commission (Debt Securities) Rules 2021, Exchange Commission (Investment Sukuk) Rules 2019, Securities and Exchange Commission (Asset-Based Security Issue) Rules 2004 including making recommendations to update related rules.
Formulation of guidelines and necessary recommendations for regular consultation and coordination with stakeholders with the aim of safeguarding investors’ interests and increasing confidence.
Formulation of a specific penal code or rules of the peace under the penal clauses of the existing laws to bring about uniformity in the prosecution and punishment of market manipulation, beneficial trading and other irregularities.
Margin Rules, 1999 including updating of existing risk management strategies and artificial intelligence and business intelligence module-rich online and offline surveillance systems or market surveillance systems to evaluate effectiveness and make recommendations for necessary reforms.
Assessing the current market structure, considering market depth, liquidity and product diversity, making necessary recommendations on how to attract domestic and foreign investors more.
Formulate recommendations to ensure cyber security, taking into account technological innovation and development and capital market-friendly fintech technology adoption to restore capital market governance and investor confidence through increased automation in capital market operations.
Formulation of a standard operating procedure or guidelines for coordination with regulatory agencies (BSEC, Bangladesh Bank, IDRA, MRA, NBR, RJSC etc.).
Formulation of recommendations regarding issue of shares through merger, amalgamation, acquisition of listed company with unlisted company or listed company before approval of the scheme in Hon’ble High Court for obtaining no-objection letter from BSEC.
Also, other important matters can be added to the scope of work through discussion with the task force.
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