BSEC to replace quarterly reporting with half-yearly disclosures for listed firms

Highlights

• Quarterly financial reporting requirement to be scrapped
• Listed companies will submit half-yearly financial reports
• BSEC to amend IPO rules after consultations with key stakeholders
• Pension and gratuity funds may be allowed to invest in the stock market
• Investors to get direct access to Capital Market Tribunal after rule changes

The Bangladesh Securities and Exchange Commission (BSEC) plans to abolish the requirement for listed companies to submit quarterly financial statements and instead introduce mandatory half-yearly financial reporting as part of broader reforms to align Bangladesh’s capital market with international standards.

Announcing the move at a programme organised by the DSE Brokers Association (DBA) at the DSE Tower on Thursday (2 July), BSEC Chairman Masud Khan said the existing reporting framework places an unnecessary compliance burden on listed companies.

“We will no longer ask companies to submit three-month financial reports. We will require half-yearly reports, and gradually our reporting framework will be aligned with international standards,” he said.

Recalling his experience in corporate affairs, Khan said companies were often required to respond to numerous regulatory queries after submitting quarterly reports.

“When I was responsible for corporate affairs, we had to report every quarter to the regulators – the Dhaka Stock Exchange and the BSEC. After submitting reports, we would receive 10, 20 or even 30 follow-up queries. I have experienced that pain firsthand. Standing here today, I can say this will no longer continue,” he said.

The BSEC chairman also announced plans to amend the country’s initial public offering (IPO) rules. He said the commission would consult the Dhaka Stock Exchange (DSE), the Institute of Chartered Accountants of Bangladesh (ICAB) and the Bangladesh Merchant Bankers Association (BMBA) before finalising the reforms.

Khan said the regulator is also working to allow pension and gratuity funds to invest in the capital market, noting that these funds are currently invested mainly in national savings certificates and treasury bonds.

He added that the commission had found many such funds operating outside existing trust regulations and would take steps to bring them into compliance.

The BSEC chief also said investors would be allowed to file cases directly with the Capital Market Tribunal after the relevant rules are amended.

“At present, no one can file cases directly with the tribunal because the supporting rules are not in place. We will amend the rules,” he said.

During the programme, DBA Senior Vice-President Moniruzzaman urged the regulator to address issues including script netting, introduce a T+0 settlement mechanism and reform member margin requirements.

He also highlighted differences in collateral requirements between the Dhaka and Chittagong stock exchanges, saying the Chittagong Stock Exchange accepts cheques as collateral while the DSE requires members to deposit the full amount. He called for replacing the existing Tk10 crore free limit with limits based on members’ trading capacity.

DBA President Saiful Islam also urged the BSEC to review the DSE’s demutualisation scheme to improve transparency in the exchange’s operations.

The programme was attended by BSEC Commissioners Tanwir Habib Rahman, Nahid Mahtab and Md Nafeez Al Tarik, DSE Chairman Mominul Islam and other capital market stakeholders.