BSEC chief vows 'aggressive' push for direct listing of big firms to deepen market 

Masud Khan, the newly appointed chairman of the Bangladesh Securities and Exchange Commission, has announced an aggressive strategy to bring high-quality companies to the stock market through direct listing, describing the move as essential for building stronger institutions and ensuring the long-term sustainability of the private sector.

Speaking as the chief guest at the 10th Anniversary Gala Night of the CFA Society Bangladesh yesterday (6 June), Masud said the regulator would actively encourage state-owned enterprises, multinational companies and fundamentally strong local corporates to join the capital market.

"Once you create a listed company, you bring in more professionals, and ultimately, you solve the issues of succession and sustainability," he said. 

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"Private sector companies often collapse when ownership changes, but listing turns a company into a lasting institution. I personally think we are going to be very aggressive in a direct listing. We will identify good companies and tell them: go for it."

The BSEC chairman pointed out that many well-governed entities, such as banks and MNCs, already maintain transparent accounts and do not necessarily need to raise fresh capital through an Initial Public Offering (IPO). For such firms, he suggested that direct listing is the most logical route to enter the capital market. 

"For banks, MNCs, and good local corporates that are already capital-sufficient, I will say: I don't want your capital; just go for direct listing to allow public participation and enhance your institutional status," he added.

Simplification over complication

Masud, who brings decades of experience from the corporate sector, laid out a regulatory philosophy based on the mantra: "Regulate where necessary and simplify where possible." He expressed a firm commitment to overhauling the existing rulebooks for IPOs, margin loans, and mutual funds, which he believes have become unnecessarily cumbersome.

"The rules have to be simplified significantly. If we want the market to deepen, we cannot work in isolation; market intermediaries must be part of this process," he said.

The BSEC chairman lamented the lack of meaningful dialogue between the regulator and market participants in recent years, noting that many constructive suggestions from reform committees previously failed to "see the light of day" because regulators believed they knew better than the market.

While advocating for simplification, he issued a stern warning against malpractice. Referring to a finance minister's stance, he said, "Please self-govern, but if you are caught violating the rules, your 'chips will fry.' Be very sure that whatever you are doing is absolutely right, because once caught, there is no easy entry back."

Science of valuation and 'horror' of paper

A key priority for the new BSEC leadership is the digitisation of the entire capital market ecosystem. Masud described the current state of reporting as a "horror story," pointing out that merchant banks and mutual funds are still required to submit applications for IPOs and rights issues on physical paper. "How are we still living in the Stone Age? This has to stop immediately," he asserted.

Addressing market volatility, he characterised the share market as a "science" involving the intricate study of valuation - a skill he noted is severely lacking among the general investing public. "We are in a situation with many uninformed investors. As a result, most trading today takes place in junk shares - small-cap companies or firms that have been closed for years. This is not efficient."

To combat manipulation in these "previous" or junk shares, the chairman announced plans for a robust, integrated surveillance system. This system will align the BSEC, the Dhaka Stock Exchange, Chittagong Stock Exchange and the Central Depository Bangladesh Limited with automated triggers to halt or release trading instantly based on suspicious activity.

CFA Society's milestone

The event also served as a platform for the CFA Society Bangladesh to celebrate a decade of promoting professional excellence. The Society recognised the top employers of CFA Charterholders in the country, including Bangladesh Bank, BRAC Bank, City Bank, IDLC Finance, EDGE AMC, IDLC Finance, Prime Bank Securities, Shanta Asset Management, Shanta Securities, Standard Chartered Bank, HSBC Bangladesh, United Commercial Bank. It also honoured top universities such as the University of Dhaka, BUP, BRAC University, and North South University for their high registration rates in the CFA Program.

M Masrur Reaz, chairman of Policy Exchange Bangladesh, delivered the keynote address, focusing on the need for a conducive fiscal policy to improve the investment climate. 

Asif Khan, president of the CFA Society Bangladesh, highlighted the society's growth, noting that it now boasts over 131 Charterholders and 80 Associate Members working across the nation's most reputed financial institutions.