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The securities regulator has requested both the bourses to award their top dealers having significant investments made through their own portfolios.
The Bangladesh Securities and Exchange Commission (BSEC) on Tuesday made the urge through separate letters sent to the exchanges' managing directors.
The BSEC officials said they have felt the necessity of awarding top dealers as part of its continuous efforts deployed to enhance the participation of institutional investors in the capital market.
"....the top dealers might have been given some sort of appreciation so that others feel encouraged investing in the capital market," the BSEC said in its letter.
The securities regulator has requested both the bourses to take necessary steps to award top dealers taking into account their turnover values, net buy amount, weighted average portfolio value etc. calculated for the period of July 1, 2021 to June 30, 2022.
Asked, the BSEC spokesperson Mohammad Rezaul Karim said the exchanges will define how many top dealers can be awarded based on the investments made through their own portfolios.
In its letter, the BSEC said the Bangladesh capital market is mostly dominated by retail investors.
"Due to lack of proper awareness of retail investors regarding risks associated with the market, they often involve themselves with risky speculations and rumour-based decision making," said the BSEC letter.
Apart from incurring huge losses by retail investors, the basic structure of the market is also damaged, according to the BSEC.
"....participation of institutional investors should be increased in the capital market urging them to invest more through their own portfolios."
The securities regulator has also said it is expected that the initiative of awarding top dealers will increase liquidity supply along with improving the base of institutional investors in the capital market.
Apart from providing client services, brokerage firms having licences of both broker and dealer make investment through their own portfolios.