Bangladesh Securities and Exchange Commission
Administration and Finance Division
Administration Department
Administration Section www.sec.gov.bd

Reference No: BSEC/Admin/51/00/Part-7/2001-882 Date: 07 October, 2024

Formation of the Capital Market Reform Task Force by the Bangladesh Securities and Exchange Commission

To ensure the overall development of Bangladesh's capital market, increase investor confidence, and ensure good governance of the capital market at the international level, the Bangladesh Securities and Exchange Commission has formed a special Capital Market Reform Task Force as follows:

1.

(a) Members of the Capital Market Reform Task Force (Not subject to rotation):
1) Dr. Mohammad Helal Uddin, Professor, Department of Economics, University of Dhaka;
2) Mr. K. A. M. Mazedur Rahman, Former Managing Director, Dhaka Stock Exchange Limited;
3) Mr. A. F. Mosaar Uddin, FCA, FCS, Senior Partner, Huda Tashi Chowdhury & Co.;
4) Dr. Md. Mostafa Akbar, Professor, CSE Department, Bangladesh University of Engineering and Technology;
5) Mr. Al-Amin, Assistant Professor, Accounting Information System Department, University of Dhaka.

(b) The Task Force will immediately commence its activities and, after considering the opinions of all concerned parties, will submit a comprehensive technical report to the Bangladesh Securities and Exchange Commission (including necessary amendment proposals after reviewing the existing structure, recommendations for upgrading to international standards where applicable, and other matters);

(c) The Task Force's office will be determined by the Bangladesh Securities and Exchange Commission based on the Task Force's recommendations;

(d) The Bangladesh Securities and Exchange Commission, along with all capital market-related institutions such as DSE, CSE, SDCL, SCCL, market intermediary institutions, and other parties, will provide necessary data and information and all kinds of assistance as required by the Task Force;

(e) The Commission may subsequently include suitable persons as members of the Task Force if needed;

(f) The Bangladesh Securities and Exchange Commission will provide secretarial assistance to this Task Force;

(g) Formation of Focus Groups: There will be various issue-based focus groups under the Task Force. Each focus group will work on specific issues and provide recommendations to the Task Force on relevant matters. It is noted that the Task Force will form focus groups with suitable persons or groups of persons after informing the Commission.

2. Composition of the Task Force:

To ensure the overall development of Bangladesh's capital market, increase investor confidence, and achieve international standard recommendations for the capital market, the BSEC has formed the 'Capital Market Reform Task Force' based on the written opinions and recommendations of capital market experts, representatives of various organizations of capital market partners (DBA, BMB, ACRA, BSCLC, economists, professionals (Chartered Accountants, Corporate Management Accountants, Chartered Secretaries, etc.), investors, etc.). Through this Task Force, recommendations will be prepared for analyzing the main aspects of the market, necessary reforms, planning, and implementation. This Task Force is essential to address current market challenges and build a sustainable capital market.

The Task Force has been formed with experienced members from relevant fields, including skilled capital market experts and analysts, economists, educators, regulators, and technologists. The Commission may subsequently change the size and scope of the Task Force as needed. The focus groups formed under the Task Force will include capital market experts and advisors, representatives of regulatory bodies, skilled professionals from market intermediary institutions, educators, journalists, analysts, and other relevant stakeholders as members.

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Reference No: BSEC/Admin/59:00/Part-7/2009- 889 Date: 07 October, 2024

3. Terms of Reference (ToR) of the Task Force: The main responsibility of this Task Force will be to carry out the following activities to ensure the development and good governance of the capital market:

1. Identify the main reasons for the small size of Bangladesh's capital market and the low ratio of 'GDP and Market Capitalization', and propose financial sector policies to the government for resolution;

2. Prepare recommendations to ensure appropriate representation of the Commission in the formulation of government economic policies and policy-making decisions to ensure financing from the capital market instead of bank loans for long-term financing;

3. Analyze the current situation and main challenges of the capital market and prepare a package of solutions to improve the good governance of the capital market according to international standards;

4. Prepare recommendations on other internal matters such as necessary training, education, seminars, workshops, strengthening the institutional capacity of BSEC, internal governance, application of technology and automation in internal operations, effective measures to protect information confidentiality, recommendations for an administrative structure compatible with capital market regulatory bodies of other developed and developing countries to enhance the capacity of the Bangladesh Securities and Exchange Commission as a statutory body, increase human resource efficiency, and improve the skills of Commission officials to be compatible with international standards;

5. Prepare recommendations for modernization to ensure transparency, accountability, and institutional good governance of institutions such as DSE, CSE, SDCL, and SCCL, along with improving the supervision activities of these institutions;

6. Prepare recommendations for the modernization of the Securities and Exchange Commission (Issue of Capital) Rules, 2001, regarding the issuance of equity securities through private placement/offers;

7. Prepare necessary policies to ensure transparency, accountability, institutional good governance, corporate declassification, accuracy of audited financial reports of listed companies, along with corporate governance, investor protection, and increasing market liquidity;

8. Prepare recommendations on technical aspects (e.g., issuer companies, issue managers and underwriters (market bankers), denouers, and other parties including auditors) regarding the information, documents, asset revaluation reports, audited financial reports, and other relevant matters submitted in the application for debt and equity securities issuance, including responsibilities and specific penalties;

9. Prepare recommendations for the modernization of internal regulations (e.g., Securities and Exchange Commission (Market Bankers and Portfolio Managers) Rules, 1996, Securities and Exchange Commission (Stock-Dealers, Stock-Brokers and Approved Representatives) Rules, 2000, Securities and Exchange Commission (Medium Funds) Rules, 2001, and other relevant regulations) to ensure transparency, accountability, and institutional good governance of market intermediary institutions;

10. Prepare recommendations for the modernization of rules and regulations regarding debt and equity securities issuance (e.g., Bangladesh Securities and Exchange Commission (Public Issue) Rules 2015, Securities and Exchange Commission (Right Issue) Rules, 2006, Bangladesh Securities and Exchange Commission (Debt Securities), Rules 2021, Bangladesh Securities and Exchange Commission (Investment Stock), Rules 2019, Securities and Exchange Commission (Asset-Backed Security Issuance) Rules, 2004, and other relevant regulations);

11. Prepare a package of recommendations for regular consultation and coordination with stakeholders to protect and enhance investor interests;

12. Formulate a specific penal code or penalty regulations under the penalty provisions of existing laws to resolve issues of market manipulation, preferential business transactions, and other regulatory violations;

13. Prepare recommendations for the modernization of the Margin Rules, 1999, along with evaluating the effectiveness of existing risk management strategies and artificial intelligence and business intelligence modules for world-class online and offline surveillance systems or market supervision arrangements, and necessary reforms;

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Reference No: BSEC/Admin/59:00/Part-7/2009- 889 Date: 07 October, 2024

14. Provide necessary recommendations for formulating strategies to attract more domestic and foreign investors by considering the evaluation of the current market structure, market liquidity, and product diversity;

15. Prepare recommendations for technological innovation and development, implementation of capital market-appropriate fintech technology, and ensuring cybersecurity by considering the technological sensitivity of the capital market, to enhance capital market governance and restore investor confidence through increased automation in capital market operations;

16. Formulate a Standard Operating Procedure (SOP) or guideline to determine ways to coordinate with the following institutions (BSEC, Bangladesh Bank, IDRA, MRA, NBR, RJSC, etc.).

17. Prepare a package of recommendations regarding the issuance of shares related to the merger, amalgamation, or acquisition of listed companies with unlisted companies or listed companies, specifically regarding obtaining a no-objection certificate from BSEC before obtaining approval from the Honorable High Court.

18. In addition, other important matters may be integrated/added to the ToR through discussion with the Task Force.

By Order of the Commission,

[Signature]

Khandaker Rashed Maksud
Chairman
Bangladesh Securities and Exchange Commission.

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Copies forwarded for information and (where applicable) action (Not subject to rotation):

1. Additional Secretary, Capital Market Branch, Financial Institutions Division, Ministry of Finance;
2. Private Secretary to the Honorable Advisor, Office of the Economic Advisor, Ministry of Finance;
3. All Executive Directors, BSEC;
   4) Dr. Mohammad Helal Uddin, Professor, Department of Economics, University of Dhaka;
   5) Mr. K. M. Mazedur Rahman, Former Managing Director, Dhaka Stock Exchange PLC;
   6) Mr. A. F. Nesar Uddin, FCA, FCS, Senior Partner, Huda Tashi Chowdhury & Co.;
   7) Dr. Md. Mostafa Akbar, Professor, CSE Department, Bangladesh University of Engineering and Technology;
   8) Mr. Al-Amin, Assistant Professor, Accounting Information System Department, University of Dhaka;
   9) PS to Chairman, BSEC;
   10) Private Secretary to the Secretary, Financial Institutions Division, Ministry of Finance;
   11) Personal staff, all Commissioners, BSEC;
   12) Office copy.

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