BSEC staffers claim to be "clerks" relying on commission for every step

Staffers of the securities regulator, including top executives, claim to have no power to make any decision as the commission, especially the chairman, remains the sole authority when it comes to regulatory decision making.

So, if the Bangladesh Securities and Exchange Commission (BSEC), for example, is to issue a letter to an issuer, inquiring about features in its initial public offering (IPO) proposal or to request information about credit status of a company's directors from the central bank, the respective department or official needs permission from the chief.

Such a practice is time-consuming, according to BSEC officials.

Talking to the FE, several senior executives said they have no authority to say 'yes' or 'no' on any decision taken by the commission.

"Like clerks, we place files before the commission [comprising the chief and four commissioners, currently three] as per their instructions. And the ultimate decision is made by the commission," said an official requesting anonymity.

"But we are now blamed for the misdeeds committed by the previous commission," he added.

BSEC commissioner Farzana Lalarukh, however, ruled out the claims of the staffers.

She said the commission approves files prepared and submitted by the executives.

"I don't know the practice of the previous commissions. But our commission just says yes or no on receipt of the files. In most cases, the commission takes decisions based on the files prepared by the executives," Ms Lalarukh said.

The Securities and Exchange Act, 1993 has a provision of power delegation to officers, commissioners and the chairman. The section 17 of this act explicitly said that except for the formulation of rules, the commission can delegate all responsibilities.

Subsequent commissions, instead of doing that, have carried out regulatory affairs through executive approvals. Under the act, any commission can delegate power through official orders; no gazette notification is required.

Presently, more than 95 per cent decisions are taken by executive orders, insiders say.

If the power were delegated, the chairman, commissioners and top executives could independently take many decisions, according to them.

There is a risk of keeping power so concentrated.

Executives cannot be held accountable if a BSEC move is challenged at court as the ultimate decision was made by executive approval. The delegation of power will make an executive responsible and accountable for a job.

When compared with other regulatory bodies, such as the Anti-Corruption Commission (ACC) and the Bangladesh Bank (BB), the BSEC seems to be a unique case.

The manual of procedure (MoP) of the central bank, the regulator of the money market, has delegated enough power to its officials.

Talking to The FE, a senior official of the BB said their authority depends on the magnitude of a decision.While issuing any show-cause notice to the intermediaries of the money market, the department concerned needs permission from at least deputy governors.

The departments themselves can take decisions to make the inquiry. "Deputy governors are just made aware of the decision. The head of a department having a strong personality can take decisions without informing the top brass too," the BB official added, preferring not to be named.

Top executives of the ACC can also exercise enough power.

Executives below the rank of commissioners and the chairman include secretary and director generals (DGs).

ACC spokesperson Md Akhtarul Islam said the commission's consent is required for major decisions. Director generals can issue a summon order to an individual for a hearing without going to the commission.

Not only the ACC or the BB, which are regulatory bodies, any bank or financial institute also delegates power. Managing directors of financial institutes have the authority to deliver decisions on many issues without receiving consent from the boards.

Ms Lalarukh said the BSEC is not like other regulatory bodies as it handles sensitive issues.

"The commission will be held responsible if it is not aware of the decisions. I think the BSEC executives have enough authority in executing jobs," she added.

mufazzal.fe@gmail.com