BSEC drafts new IPO Rules requiring stock exchange approval before listing
Companies seeking to offer equity securities to the public must obtain approval from the commission
The Bangladesh Securities and Exchange Commission (BSEC) has released the draft of the Bangladesh Securities and Exchange Commission (Public Offer of Equity Securities) Rules, 2025, introducing a new requirement for stock exchange approval prior to listing.
The draft, published on the BSEC website on Thursday (30 October), invites public feedback within 15 days.
The decision to release the draft was taken at a commission meeting held in mid-October.
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According to the proposed rules, companies seeking to offer equity securities to the public must obtain approval from BSEC and simultaneously submit an application to the relevant stock exchange for main-board listing. Those using the book-building method must also complete a roadshow before submission.
Once an application is filed, the stock exchange will upload it online and notify eligible investors (EIs), who will have seven days to submit comments. The exchange will forward these comments to the issuer and issue manager within three days, and they must respond within seven days.
The stock exchange may verify financial statements and documents directly, through a review panel, or by appointing an independent auditor—completing the process within 30 days. It may also request clarifications from issuers, issue managers, auditors, valuers, underwriters, bankers, or credit rating agencies.
Within 45 days, the stock exchange must submit its recommendation to BSEC—either for listing or rejection—along with observations and a detailed checklist. For positive recommendations, the final red-herring prospectus will also be sent to the Commission, which may extend the review period by up to 15 days if needed.
The red-herring prospectus must include valuation methods outlined in Annexure-C and other recognized global approaches, with detailed calculations based on both quantitative and qualitative factors. Valuations must be submitted to the issuer or issue manager within three days of the roadshow and included in applications to both the stock exchange and BSEC.
The draft rules also require a summary report of IPO valuations, covering the 5th, 25th, mean, median, 75th, and 95th percentiles. EIs' valuations can be collected via an online platform approved by the stock exchange.
To determine the indicative price, input must be received from 45 EIs across three investor groups—portfolio managers, stock dealers, and asset managers (at least 15 from each group)—and an additional 30 EIs from banks and other institutional investors (at least 10 from each group).
