BSEC to conduct intel ops to combat manipulation

The Bangladesh Securities and Exchange Commission has planned to conduct intelligence activities with the aim of preventing and detecting fraudulent activities, market manipulation, unscrupulous business practices and insider trading on the stock market.

The BSEC also aims to assess the valuation of market intermediaries, self-regulatory organizations, listed companies, and assets of individuals related to the capital market.
A qualified auditor selected by the Financial Reporting Council will carry out the valuation.
The new Bangladesh Securities and Exchange Act, 2022, drafted by the BSEC, includes the detective activities as part of the ‘Commission Activities’ section.
The act will replace both the Securities and Exchange Ordinance, 1969 and the Bangladesh Securities and Exchange Commission Act, 1993.
Financial Institution Division of the finance ministry recently sought public opinion on the draft act, setting a 15-day response period.
The draft Bangladesh Securities and Exchange Act, 2022 allows the commission to conduct intelligence activities to prevent fraudulent activities on the market, BSEC officials said.
According to the officials, the new strategy is part of a broader effort to restore the investors’ confidence in the stock market, which has been plagued by allegations of corruption and misconduct in recent years.
The act also empowers the regulator to assess and control customer contact registrars for collecting and inspecting investors’ information.
In addition, it may regulate the activities of financial analysts, research analysts, investment advisers, and depository and clearing participants.
The commission will also have the authority to assess and regulate mergers, acquisitions, takeovers, affiliations and reconstructions of listed companies.
According to the draft rules, the BSEC or the stock exchange would conduct surveillance activities for the supervision and monitoring of the securities market.
The regulator may also enter into joint activities, cooperation, and information exchange agreements with national and international agencies.
Additionally, the BSEC has included a bankruptcy remoteness asset provision in the draft rules to determine which assets will remain excluded from distribution or confiscation if a person or company declares bankruptcy.
The provision states that trust money, securities, or guarantees given to the Central Counterparty and Depository for clearing and settlement purposes cannot be confiscated or distributed.
As per the draft act, the BSEC has the authority to establish one or more special tribunals to serve the purpose of the act.
The Sessions Court or its subordinate court may transfer ongoing cases or proceedings to the special tribunal within 120 days, either on their own initiative or following an appeal from the commission.
The special tribunal will conduct judicial proceedings from the stage it receives the case unless it decides otherwise.
If a party is aggrieved by the judgment of the special tribunal, the party may appeal to the High Court within 60 days of the judgment.
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Source: newagebd