Desk Report: The stock exchange, known as the primary regulator of the stock market worldwide, is considered as the regulatory authority.
In Bangladesh, laws also grant some authority for oversight and decision-making. However, in reality, the stock exchange may not be able to exercise its authority effectively.
Despite allegations from various quarters, even though the stock exchange is being blamed for market manipulation, it lacks the capability to take action. It can only transmit information to the Bangladesh Securities and Exchange Commission (BSEC) online.
According to the law, the power of listing lies with the stock exchange. However, it has no means to list a company coming through IPO without adhering to the rules.
If a listed company violates regulations and fails to provide information to investors as per the law, the exchange has no authority other than suspending transactions or delisting the company without any further power.
However, even this authority cannot be effectively utilized. Visiting a company’s office or premises requires permission. Sometimes, permission is delayed for months or even years despite repeated requests.
There are specific laws to determine the category of a share. In this regard, BSEC has imposed more obligations on pre-approval. Despite not taking AMC into account in criticism, granting permission to categorize a company into the ‘zero’ category did not prove effective over the years in terms of profit.
Employees claim that no global regulatory body dictates when transactions should occur in the stock exchange. On March 7th, the trading hours were reduced by one hour from 10 am to 1:40 pm, according to the interests of religious and fasting people.
BSEC has changed the decision by reducing trading hours by 20 minutes from 9:00 am to 1:40 pm. They justify this decision by stating that reducing trading time will decrease transaction volume. Consequently, DSE’s transactions have decreased from Tk 190 crore to Tk 563 crore. The share price has dropped by 77%, and the index has lost 51 points.
DSE claims that advancing trading time by half an hour to 9:00 am poses challenges for fasting people, and starting the entire system within half an hour of opening the office at 9:00 am is also a challenge. Moreover, banks are concerned about completing transactions 50 minutes before the market closes.
The brokers’ organization, DBA, stated that the stock exchange is now nothing more than a ‘post office.’ If they want to obtain different information from brokerage houses or listed companies, they have to use the stock exchange.
However, the exchange cannot effectively use its authority where more control is needed to prevent irregularities and malpractices.
MD of DSE, Tariquzzaman, admitted that the regulatory body has taken some authority from time to time through separate orders or directives.
However, it is unknown whether the stock exchange is using its authority. He emphasized the need to create an appropriate environment for using power, rather than just having it in the books.
Chairman of DSE, Hafiz M. Hasan Babu, stated that having power alone will not be effective; it must be used in the right environment.
He remarked, “Injecting a push from outside will not work. The stock exchange is not just a post office. If I can’t say whether the store should be open or closed properly, then what is my job?”
DSE spokesperson Rezaul Karim stated that there may be differences on some issues. However, he is unaware of the stock exchange’s ability to use power.
Even though the law allows it and there are specific directions, if there is a clear recommendation to increase power, DSE may grant it. The commission will undoubtedly consider it carefully.
(Source: Daily Samakal, Printed Version;14.03.2024)