The Bangladesh Securities and Exchange Commission (BSEC), the country's capital market regulator, has expressed strong dissatisfaction over recent market surveillance activities and investigations conducted by the Dhaka Stock Exchange (DSE).
Following the Durga Puja holiday break, BSEC held a meeting with top DSE officials today (25 October) to discuss market monitoring and surveillance operations, emphasising the urgent need for result-oriented, purposeful, and meaningful probes.
During the session, the commission reviewed DSE's inquiry reports and surveillance mechanisms, with the BSEC chairman highlighting that most DSE investigations lacked accurate data and concrete evidence.
These flawed reports made it impossible to identify manipulators, conduct proper judicial proceedings, or enforce penalties, ultimately forcing authorities to acquit suspects without trial, BSEC observed.
The regulator said investigations conducted without clear objectives or sufficient evidence create fear and instability rather than improve market discipline. It said routine surveillance must continue, but probes should be logical, targeted and supported by evidence.
The meeting was attended by DSE Chairman Mominul Islam, Managing Director Nuzhat Anwar, shareholder directors Minhaz Mannan Emon and Mohammad Shafiqul Islam Bhuiyan, and the exchange's acting chief regulatory officer. BSEC was represented by Chairman Masud Khan, Commissioners Nahid Mahtab and Md Nafeez Al Tarik, and senior surveillance officials.
This intervention comes at a critical time as the capital market has faced a sharp downturn since August despite an initial surge under the new Commission.
DSE data shows the primary DSEX index dropped by nearly 450 points, market capitalization plunged by approximately Tk27,000 crore due to heavy selling pressure, and daily turnover shrank drastically from Tk1,200 crore to around Tk400 crore.
Market stakeholders and large institutional investors, previously, have voiced serious concerns, alleging that over-surveillance and aggressive inquiries – such as issuing letters to brokerage houses or probing large buy and sell orders – have panicked investors.
They argue that forming inquiry committees, demanding transaction explanations, and issuing penalty notices whenever share prices rise creates an atmosphere of fear, often based on suspicion, which ultimately forces major investors into inactivity.
DSE welcomes meeting
DSE shareholder director Emon welcomed the BSEC initiative, saying aimless investigations erode investor confidence and undermine the market's independent functioning.
He said the meeting offered an opportunity to address a longstanding concern, as such probes weaken confidence in both individual stocks and the broader market.
The commission chairman affirmed that routine investigations would continue, but stressed that they must be accurate, meaningful and result-oriented, Emon said.
BSEC chair calls for meaningful probes
Meeting sources said, the BSEC chairman shared that he has numerous investigation reports where individuals had to be acquitted without any penalty.
The chairman then asked: "On what basis did you conduct these probes? If an investigation lacks accurate data and evidence, what is the purpose of such a probe?", said one source.
The chairman said this type of probes have no impact other than creating fear and instability. He instructed the DSE surveillance team to refrain from carrying out such probes.
Sources said, Chairman Masud Khan expressed dissatisfaction with the overall oversight mechanism, surveillance service systems, and monitoring arrangements of the stock market.
He inquired where the root problems lie in DSE's investigations, how the stock exchange manages its service systems, and what causes these adverse market reactions, seeking an unbiased opinion from everyone present.
Meanwhile, DSE representatives explained that they follow standard procedures whenever their surveillance software triggers a red alert, and keep the commission informed.
Beyond this, investigations are also carried out based on various directives issued by the Commission, with the findings subsequently reported back. In connection with these matters, the stock exchange issues various queries to brokerage houses on different issues and ultimately conducts investigation activities based on those responses.
The DSE submitted nearly 150 investigation reports to the commission in 2025, including around 50 initiated at its direction and nearly 100 triggered by the exchange's own surveillance system. A similar number of reports were submitted in 2026.