The DSE Brokers Association of Bangladesh (DBA) has called for an investigation into capital market activities over the past 15 years, aiming to eliminate discriminatory practices and better serve investors' interests to restore their confidence.
The platform of trading right entitlement certificate (TREC) holders of the premier bourse also sought re-evaluation of the Dhaka Stock Exchange (DES) demutualisation scheme and equity in appointing board directors.
The demands were made in a letter, signed by DBA President Saiful Islam, sent to Finance Adviser Salehuddin Ahmed on Sunday. The letter was also sent to the chairman of Bangladesh Securities and Exchange Commission (BSEC).
In the letter, DBA demanded equality among the members of the DSE Board of Directors by appointing six independent directors and six shareholder directors and appointing one of the shareholder directors as the chairman of the board.
DBA sought a re-evaluation of the DSE’s demutualisation scheme and its progress.
To restore investors' confidence in the market, the platform of stock brokerage houses called for an inquiry committee to look into the material activities of the capital market during the last 15 years (2010-2024).
On August 22, DBA called for the restructuring of the Dhaka Stock Exchange board, which consists of 13 members, including seven independent directors.
These independent directors are typically chosen from a panel recommended by the DSE board. However, recent developments have left a significant gap in leadership.
Stockbrokers demanded independent directors of the DSE to be appointed from various sectors, including the Bangladesh Bank, Bangladesh Supreme Court Bar Association, Federation of Bangladesh Chambers of Commerce and Industry, and non-government organisations.
DBA in its letter mentioned a list of organisations from which expert individuals could be selected.
"We have learned that seven independent directors, including the DSE chairman, have resigned from their positions on the board. As a result, the board's functions have been temporarily delegated to four elected shareholder directors and the DSE ex-officio," read the letter.
On August 21, BSEC formed two separate four-member committees to look into the affairs of the DSE and the Chittagong Stock Exchange.
The committee on DSE is led by Md Abul Kalam, a director at BSEC. Other committee members are BSEC’s Additional Director Mollah Md Miraz Us Sunnah, Deputy Director Md Bony Yeamin Khan and Assistant Director Muhammad Sadequr Rahman Bhuiyan.
As per BSEC’s order, the stock exchanges will assist and facilitate the audit activities of the committees in such a way that all the information sought or access to the premises intended by the committee is granted without any delay while maintaining all security protocols.
The committees have been asked to submit their reports to BSEC within 20 working days.
Earlier, in April 2022, BSEC appointed an independent auditor for DSE to evaluate the reasons behind the failure to achieve all 12 objectives laid out in the demutualisation scheme in the last 10 years.
The auditor examined the accomplishment of the decoupling of ownership and trading rights in line with the spirit of the demutualisation act of the stock exchange.
According to the DSE Demutualization Act, 40 per cent of the DSE’s shares were credited to its members’ accounts, while the remaining 60 per cent were kept in a blocked account.
After selling 25 per cent of its shares from the blocked account to strategic investors, the bourse would float the remaining 35 per cent through an initial public offering (IPO).
After the stock market crashed in 2010, stakeholders demanded that the government ensure monitoring to stop manipulation and bring transparency to the stock market, to restore investors’ confidence. Following the demand, the act was passed in 2013.
