DSE to compensate 17,332 fraud-hit investors, push risk-based oversight

Infographics: TBS

In a major bid to restore investor confidence, the Dhaka Stock Exchange (DSE) will start paying compensation to 17,332 affected clients from 28 September while introducing risk-based capital supervision and digital oversight to prevent brokerage fund embezzlement.

The initiative will enable nearly 97% of the 17,925 investors affected by five defaulted brokerage houses – Moshihor Securities, Tamha Securities, Crest Securities, Shah Mohammad Sagir & Co Ltd, and Banco Securities—to fully recover their claims of up to Tk5 lakh each from the Investment Protection Fund (IPF).

Announcing the landmark decision at a press conference today (22 September) at the DSE Tower in Nikunja, DSE Chairman Maminul Islam said the five rogue brokerages had collectively embezzled Tk250 crore from their clients.

At the event, the DSE also launched its new website with featuring the real time market update including detail information about the listed companies.

The DSE chairman said they had received claims from affected investors amounting to Tk72 crore so far. Of this, Tk35 crore had already been disbursed through recoveries from the brokerage firms. The remaining Tk37.60 crore will be paid from the IPF, with the disbursement scheduled to begin on 28 September and expected to take one to two months to complete.

He said funds from the IPF would be disbursed to verified affected investors of Moshihor Securities Limited starting 28 September. The outstanding dues of verified affected investors of the other four firms will also be paid in phases according to schedules to be announced later. Only investors who receive an SMS from the DSE will be eligible to collect their cheques from the DSE office on their designated dates.

While 17,332 investors will receive their full claims under the Tk5 lakh payout ceiling, the remaining 593 investors with larger claims will still have outstanding dues. The DSE chairman assured that legal measures, liquidation of securities held by the defaulting brokerages, recovery from directors' personal assets, and future inflows into the IPF would be mobilised to settle their remaining claims.

Describing the compensation plan as a moral duty rather than merely a regulatory requirement, Maminul Islam said the embezzlement had severely affected retired people, teachers, judges and small retail investors, leaving them financially stranded. The initiative has received full cooperation from the Bangladesh Securities and Exchange Commission (BSEC), which expanded the compensation scheme to cover clients of all five defaulted brokerages following a request from the DSE.

To ensure sustainable funding for investor claims, the Investor Protection Fund receives contributions from brokerage trading commissions, as well as 25% of the interest earned on funds held in brokerage accounts, under a policy decision adopted in 2025.

Meanwhile, legal action against the offenders is still underway, with four defaulted firms facing prosecution by the Anti-Corruption Commission (ACC) and another involved in ongoing court litigation.

The DSE chairman said the ACC had already submitted charge sheets against two firms to the court. 

DSE to introduce digital surveillance

Alongside investor relief, the capital market operator is taking preventive measures to ensure such financial scams do not recur. DSE Managing Director Nuzhat Anwar said the premier bourse will introduce Risk-Based Capital Supervision and upgrade its IT infrastructure to digitally monitor brokerage activities.

Recognising that physical audits of roughly 250 operational brokerage houses are impractical given current staffing levels, the DSE plans to leverage automated digital surveillance to detect irregularities early and prevent fund diversion.

Speaking about the broader vision for the market, IPF Chairman Nasreen Begum expressed confidence that the settlement process would strengthen investor protection and restore public trust in the capital market. She added that a secure investment environment is crucial to driving national economic growth.

T+1 settlement, Nasdaq trading engine in reform drive

The DSE is also preparing a series of structural reforms to modernise Bangladesh's capital market infrastructure. By December 2026, the exchange aims to introduce T+1 settlement and scrip netting to speed up transactions and improve market liquidity. 

A dedicated trading platform for open-end mutual funds is scheduled to launch by November 2026, enabling seamless trading under existing regulations.

Looking ahead, the DSE plans to deploy Nasdaq's advanced trade-matching engine and introduce financial derivatives by January 2028, backed by comprehensive market awareness campaigns.

The exchange is also upgrading its disaster recovery system by December 2026 and finalising industry reclassification following board approval and regulatory consultation.

To boost fixed-income trading, the DSE has cut bond valuation costs by nearly 80% and is encouraging new corporate bond listings on the main board. To attract high-quality equity listings and address a listing drought that has persisted for more than two years, the DSE aims to bring at least 10 blue-chip companies to the market by 2027 through direct listings or initial public offerings (IPOs).

To facilitate this, the exchange is preparing draft rules for direct listings and simplifying IPO regulations. As an incentive, it will offer a 50% waiver on listing fees for companies applying for IPOs or direct listings by March 2027.

Meanwhile, high-level government efforts are underway to attract foreign portfolio investment through international debt instruments.

Maminul Islam said the government has initiated steps to issue sovereign bonds for international investors. A high-level delegation, including the prime minister, finance minister and special assistant to the prime minister on capital markets and investment, is visiting New York to meet leading global investment banks.

The initiative seeks to facilitate commercial and sovereign bond issuances and attract sustained foreign capital inflows into Bangladesh's financial markets.