The Dhaka Stock Exchange (DSE) seeks authority to review applications of initial public offerings (IPO) so that it can ensure quality listings in order to boost investors' confidence.
Once the stock exchanges had the opportunity to examine IPO applications and give their review, but currently the Bangladesh Securities and Exchange Commission (BSEC) approves all types of public offerings.
"The stock exchanges should play a role in the IPO approval process, which would reduce the pressure on the regulator," said Dr. ATM Tariquzzaman, managing director of the DSE, while speaking as chief guest at a programme organised by the Capital Market Journalists Forum (CMJF) on Tuesday.
Mr Tariquzzaman, who served as BSEC executive director for a long time, took charge of the DSE in September this year.
He talked about stock price manipulation, benefits of stock exchanges' demutualisation, strategic investors & technical assistance, investor protection, and ensuring good governance in the market.
Replying to a query, Mr Tariquzzaman said floor price would not be able to help retain investors' confidence in the market.
"Personally, I do not support the floor price. It is a direct intervention in stock price discovery. Neither the regulator nor the stock exchange can fix the stock prices".
In another query, Mr Tariquzzaman said the demutualisation act that separated ownership from management in the stock exchanges gave importance to independent directors.
"After demutualisation, the stock exchanges have benefited a lot. The board has no influence on the operation.
"But it seems some aspects need to be revised. We will discuss with the regulator," he said without an explanation.
The Chinese consortium, comprising Shenzhen Stock Exchange and Shanghai Stock Exchange, bought 25 per cent stake in the DSE as a strategic investor. It proposed giving some technical assistance.
"Some work on that proposal has already been done. There is room for progress. Implementation has been delayed due to the pandemic," said Tariquzzaman.
Some changes and amendments in the laws and regulations are necessary for the development of the market.
On investor protection, the DSE chief said the bourse was striving to establish good governance to prevent financial frauds and to shield investors from fund embezzlement.
He said he believed that investors' confidence would be restored only if good governance was ensured.
Asked if the DSE could play an effective role in averting manipulation, Mr Tariquzzaman said the surveillance team of the DSE was working to do so.
Reports of most investigations conducted in recent times by the DSE on share price manipulation have been submitted to the regulator, he claimed.
The DSE needs to be strengthened to stop manipulation and carry out in-depth investigation, particularly in cases when its officials conduct factory inspections, the DSE managing director said.
At present, the prime bourse requires prior permission to inspect any company's factory.
Asked why the DSE appointed the same auditor for 36 years, its chief said, "I am surprised. It violated the principles of auditing."
Working together for a long time creates a close relationship with each other. "This may affect the auditing activities as auditing is one of the most important factors of ensuring good governance."
On listing of weak companies, he said, the regulator must approve IPO applications after a thorough examination.
CMJF President Ziaur Rahman presided over the event conducted by its General Secretary Abu Ali.