Shakib’s gold trading firms’ explanation satisfies BSEC

The Bangladesh Securities and Exchange Commission (BSEC) is satisfied with the clarifications and explanations from Reliable Commodities Exchange Company and Buraq Commodities Exchange Company owned by cricketer Shakib Al Hasan.

The securities regulator on 16 May asked the two firms to explain their positions regarding the confusion that emerged due to the name and nature of their business.

A basket of commodities, if traded in a fashion of futures contracts, must be done through licenced commodities brokers under the umbrella of a licenced commodities exchange and according to law, BSEC is the authority to issue the licences, while it is yet to provide any in the country.

The firms of Shakib explained their position to the BSEC and the regulator is satisfied that they are not engaged in any futures contract.

The commission in its letter to the companies on Wednesday said the firms must seek its approval before launching any commodity futures contract and that must be done through an approved commodities exchange.

The regulator also suggested the two firms exclude the wording "Commodities Exchange" from their name since it creates confusion about their business nature.

A commodities exchange hosts the trading of standardised commodities contracts, while brokers facilitate the trades on behalf of the buyer and seller.

Shakib's two firms offer customers to buy imported gold bars, which is convenient for the non-users of the precious metal who want to hold it as a stable asset class to park their idle money into.

The Chittagong Stock Exchange is going to launch the country's first commodities exchange.