The securities regulator has taken another step towards deregulating the capital market by decentralising its internal operations and restoring regulatory powers to the stock exchanges, aiming to speed up services and strengthen market oversight.
The latest move came last week when the Bangladesh Securities and Exchange Commission (BSEC) allowed market participants to submit routine applications and documents directly to the executive directors of the relevant departments instead of routing them through the commission chairman.
Under a directive issued on Thursday, self-regulatory organisations (SROs), listed companies, registered market intermediaries and other capital market-related entities and individuals will now submit general applications, reports, statements and correspondence directly to the executive directors of the respective BSEC departments.
Previously, such applications had to be sent to the BSEC chairman, resulting in delays as documents were processed through the chairman's office and signed by the BSEC chief and the commissioners before being forwarded to the relevant departments.
When asked for comment, BSEC Chairman Masud Khan said the change was part of the regulator's broader deregulation agenda aimed at ensuring greater accountability among officials and faster resolution of stakeholders' issues.
"Every day, around 100 to 150 general applications are submitted to the chairman before being forwarded to the concerned departments. The process wastes a lot of time," he said.
"It will be much faster if the letters go directly from the dispatch section to the concerned executive director."
Mr Khan said only specific complaints or policy matters should require the attention of the chairman or commissioners.
"As part of our mandate and the government's commitment to deregulation, the capital market will gradually see greater delegation of authority within the regulatory bodies to ensure quicker disposal of issues," he said.
Mr Khan said responsibility should rest with the officials entrusted with a particular task.
"If I intervene myself, they will avoid their responsibility," he said.
The commission is also shifting supervisory responsibilities back to the Dhaka Stock Exchange (DSE), allowing it to exercise powers already provided under existing regulations.
According to the BSEC chairman, the DSE will now be responsible for routine inspections of brokerage firms, while the commission will focus on investigations and formal inquiries.
When the DSE cited manpower shortages, Mr Khan said, he suggested appointing five or six audit firms to inspect high-risk brokerage houses under an annual schedule.
Using a standard operating procedure (SOP), the audit firms would examine issues such as deficits in consolidated customers' accounts (CCA), compliance with margin lending rules and the adequacy of back-office software before reporting their findings to the exchange, he added.
"This is another example of deregulation. The DSE should not have to seek my permission for inspections. The BSEC should intervene only after irregularities are identified," he said.
Mr Khan added that further measures to decentralise powers within the BSEC would be introduced in the coming months.
The regulator has already restored several powers to the DSE.
In July, the BSEC clarified the listing regulations, removing ambiguity over the exchange's authority to suspend trading of companies experiencing abnormal price movements unsupported by fundamentals.
The clarification followed a series of speculative rallies in weak companies, including Khan Brothers PP Woven Bag Industries, where prices surged on rumours before collapsing, leaving many retail investors with heavy losses.
Following the clarification, the DSE has begun suspending trading in companies showing unexplained price movements.
A senior DSE official said the move would help protect investors from speculative trading.
"Investors will now remain cautious because trading in a company can be halted at any time if abnormal price increases are not supported by fundamentals," the official said.
Last month, the BSEC also restored the exchanges' authority to determine circuit breaker limits for listed securities.
Although the listing regulations had already empowered the exchanges to set market control parameters independently, a regulatory directive issued in June 2021 had effectively curtailed that authority.
BSEC officials said the exchanges should be allowed to exercise powers already granted under their own regulations.
Meanwhile, the commission has agreed in principle to allow the stock exchanges to conduct immediate inspections of listed companies without prior regulatory approval where there is prima facie evidence of wrongdoing.
The move follows complaints from the exchanges that they were unable to inspect companies despite indications of mismanagement, financial irregularities or credible information from shareholders and insiders.
DSE officials said they submitted a draft amendment to the BSEC last month seeking inspection powers over listed companies.
After reviewing the proposal, the regulator requested a comprehensive amendment to the listing regulations, which is expected to take about two months to finalise, they said.
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