DSE plans sophisticated system for accurate company disclosures
The DSE managing director emphasised the necessity for the DSE to have inspection authority
The Dhaka Stock Exchange (DSE) plans to establish a sophisticated platform dedicated to ensuring accurate disclosures by listed companies, aiming to prevent the dissemination of misleading information.
ATM Tariquzzaman, the newly appointed managing director of the country's premier bourse, unveiled this initiative during a programme on Tuesday, underscoring the current manual process of disclosures and circulation as prone to errors.
Emphasising the need for enhanced transparency and increased investor trust at the "CMJF Talk" arranged by the Capital Market Journalists' Forum (CMJF) at its office in Dhaka, he outlined the plan for developing advanced infrastructures to deliver timely disclosures.
CMJF President Ziaur Rahman presided over the event, conducted by its General Secretary Abu Ali.
ATM Tariquzzaman, who previously served as the executive director of the Bangladesh Securities and Exchange Commission (BSEC) and assumed the DSE role in September, provided insights into the current state of the bourse and outlined various developmental plans.
In a question-and-answer session, journalists raised a range of issues, including market manipulation prevention, demutualisation, strategic investment, technical assistance, inclusion of reputable companies in the market, investor protection, and ensuring good governance in listed firms.
ATM Tariquzzaman also suggested a review of the demutualisation scheme, which separated the management and ownership of the stock exchange in 2013.
Highlighting the preference for individual directors over primary shareholders in managing the stock exchange, he acknowledged the need for corrections and announced plans to initiate a scheme review.
The managing director further emphasised the necessity for the DSE to have inspection authority without requiring approval from the BSEC.
Previously, the stock exchange could independently conduct on-site inspections, but the current process necessitates regulatory approval, leading to delays.
Tariquzzaman advocated for the stock exchange to have direct authority to inspect listed companies.
Expressing his views on the role of stock exchanges in vetting Initial Public Offerings (IPOs), ATM Tariquzzaman stated that stock exchanges should play a more significant role in the process.
While acknowledging their diminished involvement, he highlighted that the market regular BSEC currently approves all types of public offerings, including IPOs.
Addressing concerns about floor prices, ATM Tariquzzaman stressed that they are not a permanent solution to build trust in the capital market.
He expressed reservations about regulators or stock exchanges fixing prices, considering it unconventional on a global scale.
He reiterated that the stock exchange is the appropriate venue for price discovery.
Discussing the strategic partnership formed through the demutualisation scheme, where DSE sold a 25% stake to China's Shanghai Stock Exchange and Shenzhen Stock Exchange, ATM Tariquzzaman mentioned technical proposals in their agreements.
Although some progress has been made, the implementation has faced delays due to Covid, with ongoing efforts to complete the outstanding work.
The managing director expressed surprise at DSE being audited by the same auditor for 36 years, citing the importance of auditor rotation for impartiality.
He acknowledged the close relationship created by long-term collaboration and recognised its potential impact on the auditor, considering auditing a crucial aspect of good governance.
Concluding the discussion, ATM Tariquzzaman addressed the need for the Dhaka Stock Exchange to have more authority to effectively combat manipulation in the capital market.
He highlighted the challenges faced when seeking information to uncover manipulation and underscored the necessity for the bourse to have increased authority, a prerogative currently held by the BSEC.