BSEC eyes direct listing for big firms: commission chairman

Renowned multinational and large corporations will be brought to the stock market through direct listing, eliminating unnecessary delays for well-established firms, the Bangladesh Securities and Exchange Commission (BSEC) chairman said today.

Masud Khan announced the plan at a shadow parliament organised by Debate for Democracy on regulatory oversight of the capital market at the Bangladesh Film Development Corporation in Dhaka.

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According to industry insiders, when a company goes public, it can choose between an initial public offering (IPO) and direct listing.

An IPO allows a company to issue new shares and rely on underwriters to manage the process and reduce risk, while direct listing allows the sale of existing shares without intermediaries, making it a simpler process that often saves on fees.

Direct listing was in effect in the local market between 2006 and 2015 but was discontinued following misuse by some companies that got listed at inflated prices.

Addressing the shadow parliament, the BSEC chief also took a jibe at roadshows, saying, "Spending money on roadshows in the name of market development cannot be justified."

On fund embezzlement by stockbrokers, he said several reform initiatives are already under way to strengthen oversight of brokerage houses.

Regular audits are being introduced to improve transparency in the capital market, he said.

He noted that, alongside the government's political commitment, good governance and accountability within regulatory institutions are essential to restoring investor confidence.

The BSEC is currently operating without political interference, Masud said, adding that the BNP government has begun implementing the commitments it made in its election manifesto to revitalise the capital market and has assured parliament that the commission will be allowed to function independently.

The current commission is carrying out its responsibilities free from political intervention, gradually creating an environment of trust in the stock market, the BSEC chairman said.

Referring to five banks and several financial institutions that were merged under the previous government, whose liabilities now exceed their assets, he said the Bangladesh Bank would take the necessary decisions to safeguard the interests of ordinary investors.

In his opening remarks, Debate for Democracy Chairman Hasan Ahmed Chowdhury Kiron said Bangladesh's capital market has failed to achieve its expected progress over the past two decades, repeatedly struggling with manipulation, loss of investor confidence, weak governance and other structural problems.

He alleged that the capital market had effectively become a playground for gamblers in the past, with around Tk 1 lakh crore siphoned off through manipulation, fraud and deception over the past 15 years.

At least 15 investors reportedly died by suicide or suffered fatal heart attacks after losing their investments during that period, he said.

The mock parliament debated the motion: "Weak Regulatory Oversight Is the Main Reason Behind the Crisis of Confidence in the Capital Market." The team from Prime University emerged victorious after defeating the team from Sonargaon University.