2024-04-06 06:36:31
The Bangladesh Securities and Exchange Commission (BSEC) headed by Prof. Shibli Rubaiyat-ul-Islam is going to spend four years amid various global crises including the war between Ukraine and Russia after the Corona situation. In this turbulent situation, the commission has taken various important decisions to control the capital market, protect the interests of investors and establish good governance. Those concerned believe that, as a result, investment-friendly environment has been ensured in the capital market of the country in the last four years.
Since the beginning of 2020, there was a continuous recession in the capital market. Added to this is the impact of the global pandemic coronavirus. At that time, Dhaka University teacher Professor Shibli Rubaiyat-ul-Islam took over as the chairman of BSEC on May 17 with the challenge of handling the turbulent capital market. Dhaka University finance department professor joined BSEC as a commissioner. Sheikh Shamsuddin Ahmed, Professor of Accounting and Information Systems Department of the same university. Mizanur Rahman and former Industry Secretary Abdul Halim. Besides, Khondkar Kamaluzzaman was in charge as another commissioner at that time. Later, as his term expired, as the new commissioner, Professor of Law Faculty of Dhaka University. Government appointed Rumana Islam. The 4-year contractual period of Shibli Rubaiyat-ul-Islam is going to end on May 16 this year. During this period, Prime Minister Sheikh Hasina has strengthened the foundation of the country’s capital market by enacting, amending, changing and revising various laws and regulations with the aim of building Smart Bangladesh by 2041. During his tenure, more than 150 steps have been taken to develop the capital market and protect the interests of investors. Although it is not visible considering the current situation and indices of the capital market, it is believed that the investors will get the benefits in the future.
Meanwhile, Professor Shibli Rubaiyat-ul-Islam has been appointed as the Director (Board Director) of the International Organization of Securities Commissions (IOSCO), an organization of capital market regulatory agencies of different countries of the world, due to his efficiency, dedication, responsibility and competence. He became the first Bangladeshi to become the Board Director of IOSCO. At the same time, he was re-appointed as the Vice Chair of the Asia Pacific Regional Committee of IOSCO. He will hold the position till the next year 2024-26. This information was informed in a message signed by IOSCO Secretary General Martin Moloney on February 20. It is considered as a big achievement for Bangladesh.
The important reforms undertaken by Shibli Rubaiyat-ul-Islam-led BSEC for the development of capital markets are as follows:
In order to protect the interests of investors, the government took measures to keep the stock market open during the lockdown announced by the government after taking charge of the capital market on May 17, 2020. At the same time, to restore good governance in the capital market, law reforms and strict measures against irregularities are taken. Administrators are appointed and management authorities are changed to bring transparency to weak and loss-making companies. Besides, to establish good governance in the stock market, the shares held by the chairman, managing director, directors of many companies as BO were suspended under the zero tolerance policy. Many bank accounts have been seized through Bangladesh Bank. Apart from this, the obligation of entrepreneurs and directors of listed companies to hold a minimum of 2 percent and collectively 30 percent of shares is ensured. In addition, meeting with the National Board of Revenue (NBR) to speed up the bond market, increasing tax benefits, increasing the urge of all commercial banks including state-owned banks to invest in the capital market, negotiating with Bangladesh Bank to reverse the decision not to pay cash dividends before September, Investment Corporation of Bangladesh (ICB) ) strengthening, strengthening corporate governance in establishing good governance, ensuring accountability of Z category companies, initiative to create a fund of 15 thousand crore rupees for the capital market, permission to conduct various types of meetings (AGM, EGM, board meeting) in virtual mode, initial public offer (IPO) process Facilitation, approval of opening of ‘digital booth’ as branch of broker house at union level and abroad, digitization of capital market etc.
To restore the good governance of the capital market in 2021, reforming various laws and taking a strict stand against irregularities, imposing strictness on companies that do not hold a minimum of 30 percent and individually a minimum of 2 percent shares, changing the management authority to bring transparency to weak and loss-making companies, establishing good governance, the shares of directors of weak companies and banks Seizure of accounts, creation of Capital Market Stabilization Fund (CMSF) worth Tk 20,000 crore, proportional distribution of shares of IPO companies, cancellation of multiple IPOs to ensure transparency, cancellation of over the counter market (OTC) and introduction of SME platform, initiatives to launch alternative platforms, 2020 Withdrawal of floor price in 2018, initiatives to increase the ability of bank-financial institutions to pay dividends, ensuring accountability of companies that do not pay dividends and nominal dividends, initiatives to increase investment in the stock market of scheduled banks, initiatives to increase transparency in the bidding process of bookbuilding, broker houses at home and abroad to increase investment. Setting up digital booths as branches, starting ‘road show’ activities in various countries to attract capital market branding and foreign investment, initiatives to digitize stock exchanges including BSEC, initiatives to introduce bonds-sukuk-treasury bonds in stock exchanges, issuing new treks to increase the number of brokerage houses. , initiatives to provide incentives to market intermediaries, initiatives to increase the paid-up capital of small capital companies, authorization of market makers, initiatives to include investment education in textbooks and initiatives to list both stock exchanges in the capital market, etc.
BSEC’s key move in 2022 is to reintroduce flow pricing. Due to the global crisis, the BSEC took the initiative to prevent the reduction of share prices by imposing the floor price in the second round on July 28 of that year to prevent the continuous fall in the capital market. This type of procedure is not in the capital market of any other country in the world but it has been maintained in the interest of our common investors. Later, on December 21 of that year, the floor price was lifted from 167 shares and mutual funds. Besides, it is recommended to determine the purchase price instead of the market value of the shares in the calculation of the investment limit of the bank, to bring back the production of the companies that have stopped production for a long time due to various reasons, to return the money to the investors by delisting the companies that have been stopped for a long time due to various reasons, to return the money to the investors by delisting them, to protect the interests of the investors. Reforms, encouraging companies to pay cash dividends instead of bonus dividends, trading of government securities (treasury bonds and debentures) in the capital market, bringing order to mutual funds, development of the bond market, trading of Islamic green sukuk, launching of investment education programs in various districts of the country including the capital, virtually in Japan. Organizing road shows, awarding Independence Golden Jubilee Award-2022 to encourage the work of market intermediaries, recommending resumption of undisclosed investment in the capital market in the budget, facilitating investment in SME platforms, assisting Chittagong Stock Exchange (CSE) in setting up a commodity exchange, Bashundhara Group as a strategic partner of CSE. Approval of subsidiary ABG, Legislation for formation of Exchange Traded Fund (ETF) and Alternative Trading Board (ATB), Return of dividend due to investors through Capital Market Stabilization Fund (CMSF), Opportunity to buy shares by depositing cheque, Rumors about capital market through social media. or taking various measures to reduce the spread of fear, taking initiatives to increase investment of banks and insurance companies in the capital market, initiatives to include investment education in textbooks from secondary level to educate the people of the country in investment education, encouraging shareholders to pay cash dividends and changing policies in the approval of bonus shares, floor Initiatives to bring cash dividends to Beneficiary Owners (BIOT) accounts to bring new investments to the capital market that have been stagnant due to price maintenance, BSEC Chairman Professor Shibli Rubaiyat-ul-Islam’s assumption of responsibility as Vice Chairman of IOSCO Asia Pacific Regional for the first time in the period 2022 to 2024 etc.
To ensure the sustainable development of the capital market in 2023, the Shibli Rubaiyat-ul-Islam-led commission took various policy-friendly steps including building a diversified market system based on equity (shares). Especially with the aim of transitioning from digital to smart Bangladesh by 2041, launching Alternative Trading Board (ATB) as a new diversified product, launching Exchange Traded Fund (ETF), creating rules to launch Commodity and Derivatives Exchange, publishing gazette, branding Bangladesh as European Organizing road shows in countries, imposing flow prices in the third round for the benefit of investors, giving recommendations in the decision to keep the bank’s investment in shares, debentures, corporate bonds and mutual funds out of the capital market exposure, building a strong bond market with the aim of helping to achieve sustainable development goals and SDGs, UNDP and International Finance. Corporations (IFC) support guidelines including MoUs, initiatives to create a specialized bond called ‘Orange Bond’ for women, policy support to increase margin lending facilities to investors, increase the investment limit of mutual funds in the capital market, keeping accounts of investors’ shares and money in brokerage houses. Initiative to launch integrated back office software instead of separate back office software, approval of Shariah Advisory Council (SAC) to bring various types of Islamic Sharia-based securities to the capital market and formation of Islamic Capital Market, organizing Asia Pacific Regional Committee (APRC) meeting of IOSCO for the first time in Bangladesh. Clarification of instructions for transfer to Z’ category, initiative to increase vigilance in the capital market before the 12th National Parliament elections, initiative to launch ‘Forex’ in the capital market to reduce the risk of currency exchange rate, re-imposing strictness on the 30 percent shareholding of entrepreneurs and directors of companies listed in the capital market, bilateral business between Bangladesh and the United States- BSEC meeting with the US Embassy on various issues including trade expansion, BSEC-Malaysian Rubber Council meeting on commodity exchange, BSEC and IMF meeting on law-policy determination, payment to affected investors in 4 brokerage houses, issuance of new guidelines on the authority of independent directors in the capital market, merger of various companies Decisions, several laws and regulations aimed at protecting the interests of investors, reforming regulations, strict stance against those involved in manipulation throughout the year in the interest of maintaining order and transparency in the capital market; Bogra and Sylhet investment education programs were held, students of various universities were given the correct understanding and skills about the capital market, Prime Minister Sheikh Hasina and Sheikh Rehana were made members of the capital market at the end of the year and Father of the Nation Bangabandhu Sheikh Mujibur Rahman 40 shares of Uttara Bank (the then Eastern Banking Corporation) before independence. Handing over to his worthy successor is one of the major achievements of 2023.
The withdrawal of floor price after the 12th National Assembly elections in early 2024 is an important step taken by BSEC. In addition, for the first time Chittagong Stock Exchange (CSE) was given a commodity exchange certificate, on the occasion of the 104th birth anniversary of Bangabandhu Sheikh Mujibur Rahman and on the occasion of National Children’s Day, 5 visually impaired people were given jobs in various institutions, with a visiting South African business delegation to further strengthen investment and trade relations with Bangladesh. Meeting, extension of reserve provision facility against unreimbursed losses due to revaluation of margin loan portfolio of customers (investors) of stockbrokers and merchant banks till 31 December 2025, decision to start trading of People’s Leasing and Finance Services Limited which has been closed for almost 5 years, auditors and audit institutions BSEC’s policy-making initiative for listing, issuance of instructions to entrepreneurs and directors of ‘Z’ category companies listed in the capital market, excluding banks, insurance and financial institutions; Directed transfer of companies to ‘Z’ category due to failure to hold Annual General Meeting (AGM) within stipulated time, closure for more than six months and excess of liabilities over assets, re-instructed promoters and directors of 26 companies to ensure minimum retention of 30 per cent of paid-up capital etc.
Those related to the capital market say that the impact of the global economic recession in the past few years has also fallen on the capital market of Bangladesh. As a result, the capital market index did not increase much last year. Throughout the year, there has been a recession in the capital market due to various issues including political situation, instability in the banking sector, reduction in foreign exchange reserves. Due to which the investors could not earn the profit as expected. However, it is expected that the capital market will turn around again with the initiatives and coordinated efforts of the current commission.