The Dhaka Stock Exchange (DSE) has identified a lack of good governance, efficiency and transparency as key issues hindering its ability to effectively contribute to the development of Bangladesh's stock market.

In addition, the new board of directors of the country's premier bourse has pledged to address these problems and provide periodic updates on their progress.

DSE Chairman Mominul Islam made this announcement at a press briefing yesterday, stating that a time-bound reform plan will be published by February.

"The main challenges in the capital market are the lack of good governance, efficiency, accountability, and transparency," he said. "These issues also persist within the DSE itself," Islam added.

As a primary regulator, the DSE has failed to fulfill its proper role in most cases over the last 15 years. Now, the premier bourse is determined to lead a significant transformation of the domestic stock market.

Islam also criticized the Bangladesh Securities and Exchange Commission (BSEC) for not playing a supportive role in the market. Instead, he said, the regulator often acts like a market operator.

"The BSEC's most reckless decision was introducing the floor price mechanism, which adversely affected both local and foreign investors. Extending the tenure of closed-end mutual funds was another poor decision that eroded investor confidence," he said.

He pointed out that weaknesses in existing listing regulations allowed underperforming companies to go public, turning initial public offerings (IPOs) into tools for manipulation.

Regarding the high number of market intermediaries, Islam said this has made their business more challenging and created difficulties for the regulator in monitoring them.

To address this, the new DSE board will not issue any new Trading Right Entitlement Certificates (TRECs). At the same time, they may consider encouraging mergers and acquisitions.

The DSE chairman also outlined several initiatives, including redesigning the DSE website, digitizing the IPO process, introducing unedited back-office software, conducting IT security audits, enabling digital public monitoring of listed firms' financial reports, and upgrading the DSE trading platform.

AKM Habibur Rahman, chairman of the Chittagong Stock Exchange, stated that the BSEC is not interfering with their activities and instead allows the country's bourses to work independently.

Saiful Islam, president of the DSE Brokers Association, said the BSEC was established to regulate and monitor the stock market. However, in recent times, it has been relying on the Financial Institutions Division to make decisions on many issues.

He urged the market regulator to abandon this trend and independently make decisions using its legal powers. He also requested that the BSEC form a fact-finding committee to identify instances of fraud in the market over the past 15 years.

Minhaz Mannan Emon and Shakil Rizvi, directors of the DSE, also spoke at the event.

Other attendees included DSE directors Mohammad Shahjahan and Richard D'Rozario, and Acting Managing Director AGM Sattique Ahmed Shah.