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The plan to launch Bangladesh’s first commodity exchange has stalled due to complications surrounding the shareholding structure of the strategic partner of the Chittagong Stock Exchange.

The exchange had already moved ahead with preparations for the proposed commodity exchange (CX), with seven brokerage firms applying for licences and completing basic infrastructure for trading. The bourse has also sought regulatory approval for the commodities to be traded.

However, progress has halted as the Bangladesh Securities and Exchange Commission must first resolve a legal issue related to the ownership limit of the strategic partner.

Ownership Ceiling Breached

Under the rules governing the commodity exchange, a strategic partner cannot hold more than 25 per cent of the exchange’s shares.

ABG Ltd., a company of the Bashundhara Group, acquired 25 per cent of the CSE as a strategic partner. However, the group also owns a brokerage firm — Stock & Brokerage Linkway — which holds an additional 0.51 per cent stake in the exchange.

This effectively pushes the strategic partner’s shareholding above the permitted ceiling.

“The regulator will not issue approvals or licences until the complications over the strategic partner’s stake are resolved,” said CSE Managing Director M. Shaifur Rahman Mazumdar.

To comply with the rules, the conglomerate would need to transfer ownership of the brokerage firm’s stake to another party.

Transfer Blocked by Tax Authority

Although the group is reportedly willing to transfer the excess shares, the process has been halted by the National Board of Revenue.

Following the political change in 2024, the tax authority asked the Department of Joint Stock Companies and Firms to suspend share transfers by several business groups, including Bashundhara, to prevent possible tax evasion. Since then, the transfer of its assets has remained frozen.

“That’s why the whole matter of the commodity exchange is hanging,” Mazumdar said.

Brokers Ready, Awaiting Approval

Despite the delay, brokerage firms remain prepared for the launch. The companies that applied for commodity broker licences include LankaBangla Securities, BR Rich, Sohel Securities, Island Securities, Royal Capital, UCB Stock Brokerage and NLI Securities.

These firms already operate on both the Dhaka Stock Exchange and the Chittagong Stock Exchange.

A commodity broker must obtain a licence from the regulator — similar to the Trading Right Entitlement Certificate (TREC) used in stock exchanges — and maintain a minimum paid-up capital of Tk 100 million.

“We have already completed the basic infrastructure for commodity trading,” said Khandoker Saffat Reza, chief executive officer of LankaBangla Securities. “Initially, the CSE will provide the back-office and order management software. We are ready for the CX.”

Regulator Still Positive

The securities regulator says it remains supportive of the initiative but insists that compliance must be ensured.

“The regulator is still very positive about the commodity exchange. But compliance is a must. That is why the CSE has been asked to resolve the concerns over the strategic partner’s shareholding,” a BSEC spokesperson said.

The proposed commodity exchange is expected to operate as an extension of the Chittagong Stock Exchange, allowing trading of standardised commodity contracts such as gold, cotton and crude oil through futures-based transactions.

Once operational, it would mark Bangladesh’s first formal platform for organised commodity trading.