Digitalisation must to end 5-10kg paper-based IPO process: Experts

Companies seeking to be listed on the country's stock market still face a cumbersome, paper-based process involving files weighing between 5 and 10 kilograms – a procedure that can drag on for years. Market experts say this outdated system is time-consuming, complex, and discourages investment, urging full digitalisation as the only viable solution.

These observations came at a seminar titled "Empowering Investors through Emerging Technology & Digital Finance," held yesterday at the Dhaka Stock Exchange (DSE) office in the capital as part of World Investor Week. The event's chief guest was Mohammad Saifuddin, commissioner of the Bangladesh Securities and Exchange Commission (BSEC).

Delivering the keynote paper, Saiful Islam, president of the Dhaka Brokers' Association (DBA), said that digital transformation of the initial public offering (IPO) process was vital for enhancing efficiency and restoring investor confidence in the capital market.

"Even today, 5 to 10 kilograms of files move between regulators and stock exchanges for IPO approvals. We no longer want to see such paperwork. The process must be digitalised," he said. "Like our neighbouring countries, we must complete IPOs within a short timeframe. There is no precedent for an IPO market remaining inactive for one and a half to two years. The capital market cannot function sustainably under such conditions."

He proposed establishing a single digital platform for IPO approvals, where regulators including the BSEC, the National Board of Revenue (NBR), the DSE, and the Chittagong Stock Exchange (CSE) could directly access and verify company submissions. "Companies would upload their documents online, enabling regulators to review them digitally. This would save time, reduce costs, and eliminate unnecessary complexity."

Saiful also noted that while investor participation – both individual and institutional – has been increasing, trading through DSE's mobile app has declined. He called for identifying and addressing the challenges faced by investors, pointing to limited access to real-time information, low financial literacy, and the risks of misinformation and digital fraud.

He further highlighted that emerging technologies such as artificial intelligence, blockchain, data analytics, and robo-advisors were transforming global capital markets, but effective use in Bangladesh would require capacity-building across all levels.

Speaking at the event, Mahtab Uddin Ahmed, president of ICMA Bangladesh, warned that inconsistent policymaking had turned the market into a "playground for unscrupulous actors." He identified weak enforcement, related-party transactions, and ineffective independent directors as persistent problems that could be mitigated through digital oversight and transparency.

BSEC Commissioner Saifuddin acknowledged the progress made in technological initiatives but noted that a lack of coordination among key stakeholders – including the exchanges, CDBL, and CSE — had limited success. He stressed the need for a collective approach to building a digital investment ecosystem.

"To build a comprehensive investment framework, we must first understand the current situation, technological gaps, and structural deficiencies," he said. "A lack of transparency in information disclosure remains a major challenge for investors."

He mentioned that the BSEC has recently introduced the Extended Business Reporting Language, an international, machine-readable format aligned with IFRS standards, which will simplify research, analysis, and monitoring. However, he emphasised that its success depends on collaboration between auditors and market participants.

Discussing market trends, Saifuddin cautioned that market participation is declining while wealth inequality is increasing, and the overall market size is shrinking by around 3% annually — contrary to the country's economic growth. "Now is the time for joint responsibility," he urged. "Technology gives us a unique opportunity to rebuild the system and transform the market structure."

DSE Chairman Mohammad Mominul Islam echoed these sentiments, saying that despite technological advancements in the country, the capital market had yet to reap meaningful benefits. "Our risk management system remains weak, and even minor information still requires brokers to send letters," he said. "The more we digitalise the market, the more accurate and transparent it will become. Immediate steps must be taken."

Among the other dignitaries present were AKM Habibur Rahman, chairman, and Mohammad Asadur Rahman, acting managing director of DSE; Md Abdul Mutaleb, managing director of CDBL; M Shaifur Rahman Mazumdar, managing director of CSE; and Asif Khan, CFA, president of the CFA Society Bangladesh