Govt committed to restoring investors’ confidence in capital market, PM tells JS

Prime Minister Tarique Rahman on Wednesday told the Jatiya Sangsad (JS) that his government is committed to restoring stability and regaining confidence of investors in the country’s capital market.

“The government has already undertaken initiatives to build a developed and sustainable capital market by ensuring good governance, transparency and accountability, increasing market depth through product diversification and expanding investment education, etc. to increase confidence of investors,” he said.

The Leader of the House said this while replying to a starred question from treasury bench lawmaker from Khulna-4 constituency Sk Azizul Baree Helal in the House with Speaker Hafiz Uddin Ahmad in the chair.

In the absence of Azizul Baree Helal, the question was placed in the House by another treasury bench lawmaker from Patuakhali-4 constituency ABM Mosharrof Hossain.

Addressing the Speaker, the Prime Minister said, “If you look at yesterday's or today's newspapers, you will see that the capital market is gradually improving and doing better.”

He outlined the government's 17 priority programmes for capital market reforms.

The measures included the appointment of a chairman and three commissioners with expertise and experience in the capital market to the Bangladesh Securities and Exchange Commission (BSEC) to ensure good governance, transparency and accountability aimed at boosting investors’ confidence; withdrawal of the floor price immediately after the new commission assumed office; and encouraging the direct listing of profitable state-owned companies through offloading shares on the stock exchange.

Other initiatives included creating opportunities for the direct listing of shares of multinational and high-capital companies on the stock exchange through share offloading; listing fundamentally strong companies, including SMEs, on the capital market; disclosing information to prevent capital market manipulation and undertaking initiatives to ensure necessary protection and incentives for whistleblowers; and formulating policies for auditing listed companies and market intermediaries through qualified auditors.

The Prime Minister said the government has also launched the Foreign Portfolio Investment (FPI) onboarding portal, initiated reforms of relevant rules in line with international standards, introduced a one-stop securities custodian service, reduced capital gains tax, abolished double taxation on dividend income, and digitised the process of opening BO accounts and capital repatriation.

He said other initiatives included incorporating provisions into the securities law to allow direct filing of cases in special capital market tribunals, forming a Capital Market Reform Commission and a special investigation commission to probe irregularities, expanding the market and products through blockchain technology, introducing online and mobile-based BO account opening and trading through e-KYC, formulating investment-friendly and rational tax policies and enabling investors to deposit and withdraw funds from BO accounts through banks and mobile financial services (MFS).

The premier said initiatives have also been taken to continue AI-based market surveillance to detect and punish those involved in market irregularities and fraud; to strengthen corporate governance in listed issuer companies, a provision has been made to deposit a portion of the interest income earned as a consolidated customer into a special investor protection fund; updating laws to ensure better protection for investors' assets and inclusion of general investors by settling transactions of government securities (treasury bonds, treasury bills and government sukuk) through stock exchanges.

Referring to the collapse of the capital market during the previous fascist government, Tarique Rahman said, “Experts, investment organizations, and various investigative agencies have conducted activities at various times to uncover the reasons for the continuous decline in the country’s stock market during the previous Awami League government.”

He said the investigations found that the major causes included market manipulation and artificial inflation and deflation of share prices, irregularities in IPOs, bonds and other issues of some companies, weak long-term oversight by the regulatory body and failure to take timely action, lack of corporate governance and financial transparency, limited participation of institutional investors, erosion of market confidence, policy inconsistencies, investor uncertainty and the absence of capital market-friendly tax policies.

Highlighting the government's actions, the Prime Minister said the government has plans to identify those responsible for the prolonged decline in the stock market, which left thousands of investors financially ruined, and take legal action against them.

He said the Anti-Corruption Commission (ACC) has already conducted investigations into allegations related to stock market scandals, leading to the identification of several individuals against whom cases have been filed and legal action initiated.

The premier said investigations are continuing to determine whether other individuals and institutions were involved in the stock market scandals, adding that the Bangladesh Securities and Exchange Commission has imposed fines amounting to Tk1,497 crore as punitive action against individuals and institutions involved in market manipulation, irregularities and corruption.

He said reports of the investigation committee, formed to identify the various institutions and individuals, have also been sent to the Anti-Corruption Commission for further action.

Replying to a supplementary question from lawmaker Sarwar Jamal Nizam on strengthening the Chattogram capital market, the Prime Minister said one of the government's key objectives is to eliminate disparities that deprive people in different sectors and regions of the country, and that the same principle applies to the capital market.

“As I mentioned in my reply to the main question, we have appointed several experts and hope they will provide appropriate recommendations. Based on those recommendations, we will, InShaAllah, strengthen not only the Dhaka Stock Exchange but also the Chattogram Stock Exchange,” he added.

Responding to another supplementary question from lawmaker Abdul Hannan Masud regarding alleged embezzlement in insurance companies, Tarique Rahman said a new chairman of the Insurance Development and Regulatory Authority (IDRA), the regulatory body for insurance companies, has been appointed.

The new chairman has already started investigating the allegations and other complaints, he said, adding, legal action would be taken in accordance with the law once the investigations are completed.