BSEC to approve IPOs based on bourses’ recommendations
Multinationals and large firms (turnover over Tk1,000cr) may opt for direct listing with just a 10% share sale requirement
The Bangladesh Securities and Exchange Commission (BSEC) is drafting a new securities rule requiring that future initial public offerings (IPOs) by new market entrants be approved according to the recommendations of the country's stock exchanges.
The decision was made at a commission meeting held on Tuesday, where the BSEC approved the draft of the Bangladesh Securities and Exchange Commission (Public Offer of Equity Securities) Rules, 2025. According to a press release issued by the securities regulator, the draft rules will soon be published for public feedback before finalisation.
BSEC spokesperson Abul Kalam told TBS that the draft includes a key provision giving priority to the recommendations made by the Dhaka and Chattogram stock exchanges when approving IPOs.
Keep updated, follow The Business Standard's Google news channel
"Once we receive public opinions, the draft rules will be finalised," he added.
In the press release, the commission said the draft rules were developed in line with the recommendations of a special task force formed to review and modernise IPO regulations.
According to the BSEC, the new rules aim to make the IPO approval process more transparent and accountable. They also set out detailed responsibilities for issuer companies, auditors, and issue managers, strengthening corporate governance and ensuring greater accountability across all parties involved.
The proposed rules also introduce a more accurate valuation system for IPO pricing, which the BSEC expects will ensure fair pricing and attract more fundamentally strong companies to the stock market.
Other reforms
Key recommendations of the task force include reducing the bidding limit for eligible investors under the book-building method from 2% to 1%, allowing for wider participation.
The 10% circuit breaker will not apply during the first three days of trading after listing, preventing artificial price swings.
In addition, issuers will no longer be able to offer discounts from the cut-off price, ensuring fair value realisation. The Tk50,000 minimum investment requirement for IPO applications will also be removed to attract more investors.
To enhance market depth, direct listing will be permitted for multinational companies and large corporations with annual turnovers exceeding Tk1,000 crore, with a reduced 10% share offload requirement. Companies with outstanding loans above Tk1,000 crore will be required to list on the stock exchange.
The draft rules also propose increasing the minimum paid-up capital to Tk30 crore for fixed-price IPOs and Tk50 crore for book-building IPOs, to ensure only well-capitalised firms enter the market.
