Brokers propose taskforce for capital market reform

The DSE Brokers Association (DBA) today (2 October) proposed the formation of a taskforce to identify key areas for reform to improve the capital market and ensure its sustainability.

The proposal was made during a meeting of the Bangladesh Securities and Exchange Commission (BSEC) with market intermediaries at the regulator's Dhaka headquarters.

Representatives from various organizations, including the DBA, the Merchant Bankers Association, the Association of Credit Rating Agencies, the Association of Publicly Listed Companies, the Financial Reporting Council, the Institute of Chartered Accountants of Bangladesh, and the Institute of Cost and Management Accountants, participated in the event.

The meeting was presided over by BSEC Chairman Khondoker Rashed Maqsood, with Commissioners Md Mohsin Chowdhury, Md Ali Akbar, and Farzana Lalarukh also in attendance.

Speaking to The Business Standard, DBA President Saiful Islam said, "If the BSEC receives various proposals from different market intermediaries and stakeholders, it may be challenging to implement reforms effectively. Rather, a taskforce would help identify core problems and necessary reforms by engaging all stakeholders and collaboratively developing solutions."

During the meeting, participants shared their views on strengthening the market and improving investor confidence through comprehensive reforms.

The BSEC also received reform proposals from key stakeholders, including the Dhaka Stock Exchange, the Chittagong Stock Exchange, and Central Depository Bangladesh Limited.

Rashed Maqsood emphasised that building a successful capital market requires the active participation of all involved institutions. He highlighted the importance of good governance, compliance with securities laws, improving transparency and accountability, and enhancing financial reporting.

Participants discussed the challenges facing the capital market and proposed solutions, such as simplifying the initial public offering (IPO) process, reintroducing direct listings for government and multinational companies, and utilising the capital market as a source for long-term financing.

The discussion also highlighted several key proposals regarding the regulatory framework of the capital market, including revamping the regulatory structure for listed institutions, market intermediaries, and other stakeholders, as well as strengthening monitoring activities to ensure proper oversight.

Promoting good governance and adherence to securities laws, increasing accountability and transparency, and ensuring proper financial reporting standards were also emphasised.

Additionally, the meeting stressed the importance of expanding and developing investment education, conducting high-quality research on the capital market, and adopting reforms based on research findings. Simplifying IPO rules, reinstating direct listing processes for government and multinational corporations, and introducing necessary reforms to justify tax benefits for listed companies were also discussed.

Finally, the meeting proposed coordinating with relevant governmental institutions to revise tax policies on dividends and capital gains, and to include the capital market as a source of long-term financing in national financing strategies and the budget. These points reflect a comprehensive approach to enhancing the capital market's efficiency and effectiveness.

According to a press release, the BSEC is committed to creating a transparent and prosperous capital market by actively seeking the opinions and participation of all stakeholders involved.

As part of this ongoing reform process, the BSEC will hold discussions with a top forum representing various capital market investor organizations. This engagement aims to ensure that the voices of all stakeholders are heard and considered in the development of the capital market.