Multinational companies must come to capital market: BSEC chairman

Multinational companies operating in Bangladesh must be brought under the capital market, Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan said today (4 September).

The commission will first encourage such companies to voluntarily list on the stock market, but if they refuse, the BSEC has the legal authority to take steps in the public interest, he said while inaugurating a two-day workshop titled "Capital Market Products and Rules" for members of the Capital Market Journalists Forum (CMJF) at Subarna Gram in Narayanganj.

The workshop, organised by the BSEC, is being held on 4 and 5 September.

"There are many large domestic and multinational companies in Bangladesh. Unless these good companies are brought to the capital market quickly, the market cannot develop as expected," Masud said.

He said the BSEC would work to bring several large and flagship companies to the capital market within the next six months to one year.

"Come voluntarily. But if you do not come voluntarily, we also have the weapon to make it happen," he said.

The BSEC chairman said securities law allows the commission to direct certain companies to list in the public interest. A legal definition of "Public Interest Company (PIC)" will also be introduced for this purpose.

Calling on large companies to enter the capital market, Masud said listing gives a company a stronger corporate identity and establishes a market value for it.

That market value can then be used for acquisitions or mergers, while shareholders who want to exit a business can sell their shares more easily, he said.

He also pointed to succession problems in family-owned businesses, saying disputes often emerge among owners when businesses pass from one generation to another, sometimes leading to fragmentation.

Listing can provide an exit option for shareholders who do not want to remain involved in the business, he added.

The BSEC chairman also announced plans to introduce direct listing and a hybrid system to bring large companies to the market more quickly.

He said the existing IPO process takes too long. Under the proposed hybrid system, a company would raise new capital through one portion while directly listing existing shares through another.

Masud said the BSEC plans to introduce "extended audits" to simplify the IPO process.

He said auditors should verify not only whether a company's financial statements are accurate, but also whether its land, machinery, inventory, receivables and supplier information reflect the actual situation.

Under the proposed system, auditors would certify the authenticity of the assets and financial information submitted by IPO applicants. This would help the Dhaka Stock Exchange (DSE) complete its IPO scrutiny process more quickly, he said.

Noting that Bangladesh's capital market remains largely dependent on retail investors, Masud said institutional investment must be increased to make the market sustainable.

The BSEC plans to expand opportunities for provident funds and other funds to invest in shares as well as corporate bonds, he said.

In developed markets, pension funds and insurance companies are major investors, he said, adding that Bangladesh also needs to bring such institutional investors into the market.

Referring to the removal of the floor price after he took office, Masud said the move had prompted global index provider MSCI to move towards withdrawing special measures imposed on Bangladesh's market.

MSCI has said it will resume regular reviews of Bangladesh's index and implementation of corporate events from November 2026, he said.

The BSEC chairman also outlined plans to give the DSE greater powers, modernise market surveillance and introduce an artificial intelligence-based surveillance system.

On the development of the corporate bond market, Masud said the commission was working to reduce main-board listing fees. This would encourage banks and other institutions to list on the main board and gradually expand the country's bond market, he added.