Written by The Banking Post
The securities regulator is set to allow the Dhaka Stock Exchange (DSE) to conduct immediate inspections of listed companies, a move aimed at strengthening oversight and protecting investors.
The Bangladesh Securities and Exchange Commission has agreed in principle to scrap the requirement for prior approval before inspections—long seen as a key obstacle to timely enforcement.
Currently, under listing rules, the DSE must seek regulatory clearance before inspecting any issuer, even when there are clear signs of irregularities such as financial inconsistencies or governance concerns.
DSE Managing Director Nuzhat Amin said the regulator has agreed to remove this restriction, paving the way for faster action. “Initially, approvals will be given on an urgent basis. Soon, the provision will be repealed, allowing inspections at any time,” she said.
The change is expected to significantly improve the exchange’s ability to respond to early warning signals, including complaints from shareholders or insider information.
Despite being responsible for listing companies, the DSE has so far lacked the authority to independently examine them—limiting its role in preventing misconduct.
In preparation, the exchange is developing an internal system to carry out inspections promptly once the rule is amended. It will continue to inform the regulator after each inspection.
The DSE already has the authority to inspect brokerage firms without prior approval. However, enforcement remains constrained by another limitation—verifying clients’ bank statements.
Officials say some brokers have exploited this gap by submitting falsified bank documents after misappropriating funds. The exchange now plans to seek permission from the central bank to verify such records.
“We will urge the central bank to allow verification of client bank statements,” the DSE chief said, adding that safeguards will be put in place to prevent misuse.
Market observers say the proposed reforms could mark a turning point in improving transparency and accountability in Bangladesh’s capital market, enabling quicker intervention against potential fraud.
