BSEC’s work plan focuses on restoring confidence, ensuring good governance 

Bangladesh Securities and Exchange Commission (BSEC) Chairman Khondoker Rashed Maqsood today (25 August) outlined a plan to conduct an in-depth review of past irregularities in the capital market.

"If a minor irregularity is not addressed at the outset, it can escalate into a major crisis. Currently, we are witnessing such situations in various areas," he said, explaining the need for this initiative.

"We will investigate the causes behind these irregularities. There are many regulations. If there are irregularities due to any loopholes, we will identify and close those gaps to prevent future occurrences," vowed the newly appointed head of the country's stock market regulator.

Maqsood, who has extensive experience in the banking sector, shared his plans with the media at the commission's building on his fourth working day after taking charge of the regulatory body.

He has also outlined short- and medium-term plans, focusing on restoring confidence in the capital market and ensuring good governance.

The BSEC chief said its primary task is to enhance governance and enforce market regulations. He noted, "In recent years, we have gradually moved away from good governance. It will take time to return to that standard."

Despite the challenges, he expressed optimism that, with the collective effort of all capital market stakeholders, it is possible to restore good governance and trust.

Maqsood emphasised that everyone must operate within a proper structure and adhere to regulations. "Before building trust, nothing should be artificially done. Confidence will be restored based on fundamental principles," he stated.

New commission's work plan  

The BSEC has expressed its determination to work in the coming days by dividing its work plan into two parts: core operations and non-core operations.

The Maqsood-led commission has identified three key issues related to core operations. It currently includes two commissioners, ATM Tariquzzaman and Md Mohsin Chowdhury, with two positions still vacant in the five-member regulatory body.

The first priority of the new chairman's plan is to establish transparency, which involves restoring internal transparency within the commission. This will include addressing any market manipulation and investigating any irregularities involving BSEC officers.

The second work plan focuses on ensuring good governance. The commission will follow three steps: first, making decisions on the commission's functions and departmental responsibilities; second, ensuring good governance among market participants, including brokers, dealers, and merchant banks; and third, ensuring good governance within listed companies.

The third work plan is market development. Maqsood noted that, while neighbouring countries were once far behind, their capital markets have since advanced significantly. "We will work intensively in the medium term," he said.

He also emphasised that while the regulations governing the capital market are sound, they have not been properly enforced. "We will focus on the effective enforcement of these laws," he added.

Reward for independent directors

Independent directors in listed companies serve as watchdogs for regulatory bodies and investors, working to protect investor interests while maintaining impartiality. 

Maqsood emphasised the importance of introducing a reward or certification system for these directors. 

"We will work diligently to establish good governance in listed companies, and we have already begun this process. Independent directors are crucial for enforcing good governance," he said. "We will assess whether these directors have any affiliations with the companies they oversee. A person with such affiliations may not be fully impartial. While some companies have effective independent directors, others are in need of improvement."

Maqsood also addressed the need to bridge the knowledge gap for independent directors and suggested implementing a system of rewards or certifications. 

"Independent directors should be recognised for their contributions beyond just board meeting fees. Since they will be fulfilling their duties diligently, they deserve to be rewarded. We aim to establish a model for this reward system," he noted.

ATM Tariquzzaman added that the commission will no longer rely on single-person decisions and will ensure equality and non-discrimination in the market. 

"The law will be applied equally to all, and there will be no bias in enforcement. We are committed to eliminating corruption and irregularities. We will review and revise existing rules and regulations to be more market-friendly, with a focus on market development and restoring confidence," he said.

In response to questions about forming a committee to review past irregularities, Maqsood said, "I have just begun this work. While we cannot establish the committee immediately, it will be done soon. Commission officials have already been re-appointed. We will approach this in phases, starting with the top priorities, and work on them in our daily operations."