The depository authority has moved to ensure the security of the shares of non-listed companies, making their transfer easier and preventing fraudulent transactions.
The services will also allow the enterprises to obtain bank loans easily by pledging shares in electronic form.
As per the existing system, the Central Depository Bangladesh Ltd. (CDBL) works as a custodian of the shares of all listed and some non-listed securities kept in dematerialised form.
Following the new development, the CDBL will work as a custodian of other non-listed companies registered with the Registrar of Joint Stock Companies and Firms (RJSC).
The CDBL’s bylaws permit it to work as a custodian of eligible securities -- listed or non-listed.
“The CDBL shall determine the securities that are eligible to be held in dematerialised form, which may include, but is not limited to, listed and unlisted securities of all types, government bonds and treasury bills, mutual funds, commercial papers, certificates of deposit, and other debt instruments,” read the CDBL’s bylaws.
Apart from 637 listed securities, the depository authority presently works as a custodian of some non-listed securities, including open-ended mutual funds, securities of the bourses and the CDBL itself.
It charges companies a fee for keeping shares under its custody.
“The board of the depository authority is likely to fix a small custodian fee for non-listed companies so that they are inspired to avail themselves of the services of the CDBL,” said CDBL’s Managing Director Md. Abdul Mutaleb.
Mr. Mutaleb said they had already discussed the matter with the incumbent chairman and commissioners of the securities regulator, and they applauded the move.
As part of the move, the CDBL will sit with the Institute of Chartered Secretaries of Bangladesh (ICSB) to inspire non-listed companies to seek the services.
As of June 2026, there are 316,150 entities registered with the Registrar of Joint Stock Companies and Firms (RJSC). The CDBL expects many of those companies to show interest in keeping their shares under its custody.
What are the advantages?
In Bangladesh, paper-based share certificates create various practical and security problems, particularly for shares of non-listed companies, ownership of which are not recorded through the electronic depository system.
Physical certificates can be forged, duplicated, stolen, or tampered with. The transfer process for such shares is also lengthy and cumbersome, as companies need to verify certificates, signatures, transfer deeds, and their own shareholder records. Any variation in signature may result in share transfer being rejected.
The share certificates can also be lost, damaged, and mutilated.
Moreover, when a shareholder dies, transferring physical shares to heirs can become complicated because the company involved must verify the original certificates, ownership records, and supporting legal documents.
These matters of concern surrounding paper shares are evident in the operations of the Capital Market Stabilisation Fund (CMSF). The CMSF emerged to ensure distribution of undistributed stocks and cash dividends issued against paper shares of listed enterprises.
A large number of shareholders of listed companies still have paper shares, in which cases dividends remain undistributed -- in the hands of issuer companies.
The shareholders might have forgotten that they had purchased the shares, or that the ownership might have changed, and the new owners are completely unaware of the existence of the assets. Some of those investors might also lack the knowledge that the paper shares had to be converted into electronic form in their own interest.
Dematerialisation improves the security, efficiency, and transparency of share ownerships by replacing vulnerable paper certificates with reliable electronic records, enabling faster transfers and reducing administrative difficulties for both companies and shareholders.
Most importantly, electronic shares kept under the custody of the depository authority will enable companies to secure bank loans easily as the ownership records are clear, transparent and maintained centrally.
