The securities regulator has embarked on a major overhaul of the country's initial public offering (IPO) regime, aiming to simplify the listing process, broaden direct listing opportunities and attract fundamentally strong companies to the market.
The Bangladesh Securities and Exchange Commission (BSEC) on Wednesday held a high-level consultation with key market stakeholders to review the Public Offer of Equity Securities Rules, 2025, with discussions centring on making the IPO process more transparent, accountable, efficient and aligned with international best practices.
The initiative is part of the commission's broader efforts to restore investor confidence and encourage businesses to raise long-term funds through the stock market rather than relying on bank borrowing.
The consultation meeting came a day after the securities regulator approved a series of reforms, including amendments to the margin rules and the introduction of scrip netting, signalling an accelerated regulatory drive to develop the secondary market.
The meeting brought together BSEC commissioners and senior officials, representatives from the Financial Reporting Council (FRC), the Institute of Chartered Accountants of Bangladesh (ICAB), the Dhaka Stock Exchange (DSE), the Chittagong Stock Exchange (CSE), the DSE Brokers Association of Bangladesh (DBA), the Bangladesh Merchant Bankers Association (BMBA), the Bangladesh Association of Publicly Listed Companies (BAPLC), CFA Society Bangladesh, merchant banks, issue managers, auditors and other market participants.
BSEC Chairman Masud Khan said the commission would undertake regulatory reforms in consultation with stakeholders to build a stronger, more credible and investor-friendly capital market, according to a statement issued by the securities regulator.
The participants reviewed every major stage of the IPO process-from the preparation of financial statements and audits to issue management, regulatory scrutiny and listing-and identified areas where the approval process could be streamlined without compromising investor protection.
The discussion also covered IPO pricing, direct listing, rights issues, the listing framework for public interest entities and measures to improve the efficiency of equity fundraising.
Participants emphasised the need to strengthen corporate disclosures, reinforce due diligence and enhance the accountability of issuers, auditors and issue managers to improve the quality of companies entering the market.
Market representatives shared experiences from recent IPOs, identified operational bottlenecks and proposed a range of regulatory reforms to simplify procedures while strengthening compliance standards and corporate governance.
A key proposal under consideration is the expansion of the direct listing framework.
The BSEC chief recently said the existing IPO approval process is excessively lengthy and burdensome, discouraging quality companies from going public.
"Companies have to wait nearly one-and-a-half years and submit piles of documents for an IPO. Bank financing is much quicker. We have to simplify the IPO process if we want fundamentally strong companies to come to the market," Mr Khan said during a CMJF Talk last week.
Under the proposed framework, private companies would be allowed to list directly by offloading only 10 per cent of their shares, compared with the existing provision under which only state-owned enterprises can directly list by offering at least 25 per cent of their shares.Financial planning services
Market participants said reforming the IPO process is one of the most critical steps towards improving the quality of listed companies and rebuilding investor confidence.
They noted that aggressive IPO pricing, weak post-listing performance of several companies and concerns over financial disclosures have discouraged many retail investors from participating in the primary market in recent years.
The commission assured stakeholders that their recommendations would be considered while framing future policy initiatives and legal reforms.
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