Published: 11:49 PM, 13 October 2026
BSEC moves to ease IPO rules to restore investor confidence
The Bangladesh Securities and Exchange Commission (BSEC) is preparing a major overhaul of its initial public offering (IPO) policy to encourage more companies to enter the capital market while strengthening safeguards for investors.
BSEC Chairman Masud Khan said on Monday that a draft of the revised policy had been prepared and would soon be published on the commission’s website to solicit public feedback.
The proposed reforms include easing direct listing requirements, strengthening the verification of financial statements and audit documents, launching a derivatives market, and expanding open-ended mutual funds.
Masud Khan disclosed the plans at a seminar titled “Digital Deception and Scam Alert”, organised jointly by the Dhaka Stock Exchange (DSE) and the DSE Brokers Association of Bangladesh (DBA) to mark World Investor Week 2026.
DBA President Saiful Islam chaired the seminar. BSEC Commissioners Tanwir Habib Rahman, Advocate Nahid Mahtab, CFA Md Nafiz Al Tarik and FCS Hossain Sahadat, along with DSE Chairman Mominul Islam, attended as special guests.
The BSEC chairman said the commission was holding regular consultations with market stakeholders to formulate policies that reflect the practical needs of businesses while protecting the interests of general investors.
Explaining the proposed changes, Masud Khan said the commission planned to strengthen the verification of companies’ audit reports and financial documents to ensure the credibility of information disclosed to investors.
The commission was also reviewing stringent conditions concerning accumulated losses, recognising that capital-intensive businesses such as power plants, cement and steel factories, and hotels could incur losses during their initial years of operation.
Listing requirements need to take these business realities into account, he said, adding that the commission was considering necessary adjustments to the existing rules.
The BSEC is also considering raising the current limit of 30 per cent on the use of IPO proceeds to repay existing loans. Any change, however, would have to be made without compromising the interests of general investors, he said.
The commission is working to broaden direct listing opportunities to increase market capitalisation and deepen the country’s capital market, Masud Khan said.
Initiatives are underway to bring multinational companies, banks, insurance companies, state-owned enterprises and other large businesses within the listing framework.
The commission is considering allowing companies with annual turnover or total assets exceeding Tk 1,000 crore to seek direct listing, he added.
However, the chairman emphasised that rigorous company selection and due diligence would remain essential under both IPO and direct listing processes to prevent a recurrence of past irregularities.
The BSEC is working to introduce a derivatives market at the Chittagong Stock Exchange (CSE) within the next six months, with plans to extend the facility to the DSE at a later stage.
The commission is also pursuing initiatives to develop the bond market and introduce real estate investment trusts (REITs), which could diversify investment opportunities and expand the range of financial instruments available to investors.
Masud Khan identified open-ended mutual funds as another priority area for developing the country’s mutual fund industry.
To widen public participation, the commission plans to establish a network of licensed mutual fund agents who would receive training and certification through the Bangladesh Institute of Capital Market (BICM).
Referring to India’s mutual fund industry, the chairman said a professional network of licensed agents could help expand access to mutual fund services in Bangladesh.
The commission has sought an extension of the tenure of banks’ special investment fund for the capital market, alongside an increase in its size, Masud Khan said.
The fund is scheduled to expire on November 30. The issue has been discussed with the Bangladesh Bank governor, and the BSEC chairman expressed optimism about a positive outcome.
He also pointed to broader economic pressures affecting the performance of the capital market.
Rising non-performing and rescheduled loans in the banking sector were increasing lending costs, making it difficult for banks to reduce deposit and lending rates quickly, he said.
International geopolitical developments, conflicts in the Middle East, fluctuations in global oil prices and changes in remittance flows were also influencing domestic market conditions.
Highlighting the growing threat of digital financial fraud, Masud Khan urged investors to verify financial information carefully and remain sceptical of promises of quick and unusually high returns.
He advised investors to examine companies’ operating cash flows rather than relying solely on reported profits when assessing their financial health.
“Profit is a concept, but cash is reality,” he said, underscoring the importance of analysing cash flow statements to understand a company’s actual financial position.
He also cautioned investors against making decisions based on rumours and unverified advice circulated on social media. Instead, they should rely on credible information sources and cultivate a habit of continuous learning, he said.
The BSEC chairman called on the media to maintain objectivity, responsibility and balance in covering the capital market.
Reports should present statements and events in their proper context rather than focus on isolated remarks or negative aspects that could distort their actual meaning, he said.
