BSEC plans AI surveillance, tighter brokerage monitoring
The DSE is developing back-office software that will prevent brokerage houses from altering client information or transaction records.
The Bangladesh Securities and Exchange Commission (BSEC) will significantly strengthen oversight of brokerage houses and introduce an artificial intelligence (AI)-based market surveillance system to curb irregularities and restore investor confidence, BSEC Chairman Masud Khan said today (18 July).
Speaking at a mock parliament debate titled "Measures to resolve the trust crisis in the capital market" at the Bangladesh Film Development Corporation (FDC), he said the Dhaka Stock Exchange (DSE) has been instructed to transform its surveillance department into an AI-driven system within the next year.
Under the proposed system, any abnormal price surge in a stock will automatically trigger a trading suspension, reducing opportunities for market manipulation. He also announced plans to eliminate the use of "wet signatures" in securities transactions, describing them as a longstanding loophole for unauthorised trades.
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The DSE is developing back-office software that will prevent brokerage houses from altering client information or transaction records, he said, adding that supervision of brokerage firms would be intensified to rebuild public trust.
Masud Khan said many retail investors, who now dominate Bangladesh's capital market, lack adequate financial literacy and often chase weak stocks based on rumours instead of company fundamentals. He stressed the need to strengthen the mutual fund sector, citing India's market as an example where mutual funds play a much larger role.
The BSEC chief also said the commission is revising the margin rules introduced last year after they discouraged many investors. Regulatory decisions, he said, would be taken in the broader interest of the market rather than to benefit specific groups.
On the merger of five banks, he acknowledged that shareholders would be affected but said the government and Bangladesh Bank must coordinate to ensure the fairest possible outcome.
The debate, organised by Debate for Democracy and chaired by its Chairman Hassan Ahmed Chowdhury, featured Prime University and Sonargaon University. Prime University, representing the government side, won the debate after arguing that weak regulatory oversight was the principal cause of the capital market's trust deficit.
