Boosting market confidence: New DSE MD for good governance, transparency, preventing manipulation

The Dhaka Stock Exchange (DSE) has appointed a new managing director (MD) after one year as the position remained vacant since September 2022 following the resignation of the previous MD due to conflict with the DSE board.

ATM Tariquzzaman, who served in the Bangladesh Securities and Exchange Commission (BSEC) for a long time, took charge as the MD of DSE on Sunday for the next three years.

In an interview with The Business Standard (TBS), he outlined his plans to increase confidence in the capital market, introduce smart technology, and strengthen surveillance to prevent manipulation, protect investors and ensure order in the market.

To make stock market vibrant and growing

Tariquzzaman aims to build a vibrant and growing stock market through the joint efforts of BSEC and DSE. Emphasis will be put on developing the stock exchange to international standards. 

He said that BSEC and DSE have common interests of making the stock market transparent and fair, protecting the investors, and conducting the market in an orderly manner.

The BSEC has a separate role. It can formulate policy, which the DSE cannot do. DSE can formulate policies which are subject to the approval of the BSEC.

Importance of good governance

ATM Tariquzzaman believes that investors' confidence will increase only if good governance is ensured in the market. In the present market conditions, there is room for further improvement in this area.

There is a lack of good governance in the capital markets of all the countries of the world, due to which a crisis has been created in many big well-regulated capital markets. Due to the global financial crisis in 2007, there have been various crises in the capital markets of the developed countries. So the problem of confidence in the capital market is a common one. More work needs to be done here.

Initiatives to stop manipulation

Both BSEC and DSE are working jointly to ensure that no one is deceived in the market and everyone can trade fairly.

Besides, surveillance will be strengthened to stop manipulation. Any unusual or abnormal trade will be dealt with according to law. As manipulation destroys good governance in the market, the surveillance system will be reinforced.

Lack of investors' awareness

From the experience of working in the regulatory body of the capital market, Tariquzzaman thinks the current problem in the capital market is the lack of investors' awareness which creates distrust.

Therefore, efforts will be taken by DSE to increase the awareness of investors, stakeholders and market intermediaries. 

He believes that if awareness increases among everyone, confidence in the market will also grow.

Bringing good companies to IPO

Many good domestic and foreign companies, despite doing their business well, are not being listed in the capital market mainly due to the lack of knowledge about what benefits can be gained by listing.

The capital market listing will lead to value creation for the companies. Besides, the companies will be able to raise capital in the long term. Their brand value will increase too. If companies can be made aware of these benefits, big multinational, and government companies will come to the capital market.

Expressing his excitement, he said initiatives, such as workshops, would be taken to introduce the facilities and to bring them to the capital market. 

Transparency of intermediaries

It is very important to ensure good governance among brokers, dealers or Trecholders. This area should be strengthened. If good governance can be ensured through efficiency development, intermediaries can play a role in manipulation prevention.

Initiatives will be taken to further modernise the record keeping of Trecholders. Let investors feel safe. Investors should rest assured that their money and shares in the brokerage house are intact. For that, it is very necessary to bring changes in infrastructure development.

In line with Prime Minister Sheikh Hasina's "Smart Bangladesh", record keeping of market intermediaries will also be made smart so that the investor can access his own investment and not get defrauded. This will require advanced software which is also available abroad.

ATM Tariquzzaman aspires to create a smart and integrated system. Online payment and settlement schemes are also available with banks. If the full system is integrated, then no one will be deceived.

In a few previous cases, the company embezzled investors' money, which will not happen again. And, the compensation process will continue for what has already happened. Strict vigilance will continue to ensure that no one is harmed further.

Reducing vendor dependency to minimise technical glitches

Advanced IT management is required in the country's capital market, which is the demand of time.

DSE's IT system is still vendor-dependent. Now, it is high time that DSE's own management system was introduced. Only then the technical glitches can be minimised.

If advanced technology is installed, the market will be transparent, and fair and investor protection will also be ensured. If investors feel safe, the market will be vibrant.

Vendor-dependent systems have several disadvantages. For any problems with the system, we have to contact the vendor and depend on their availability. We have to come out of it. We need our own software which we can run by ourselves. 

New DSE MD meets DSE Brokers Association of Bangladesh

DSE Brokers Association of Bangladesh (DBA), the only organisation of capital market stock brokers, had a courtesy meeting with ATM Tariquzzaman, the newly appointed MD of DSE. 

On Sunday, a group of representatives from the DBA Board of Directors, led by President Richard De Rosario, paid a courtesy call to the DSE MD.

In the meeting, the DBA representatives informed Tariquzzaman about the current situation in the capital market. 

Tariquzzaman sought cooperation in solving various problems faced by stock brokers.