Investor protection to remain central in BSEC’s IPO reform push
The Bangladesh Securities and Exchange Commission (BSEC) has reiterated that protecting investors will remain its top priority as it moves to boost the capital market through more Initial Public Offerings (IPOs).
Speaking at a discussion titled “IPO Proceeds Utilization for Loan Repayment or Investments of Issuer” at the BSEC headquarters in Agargaon on Thursday; Chairman Khondoker Rashed Maqsood said efforts to expand listings will not come at the expense of investor interests.
“Our goal is to build a sustainable and vibrant capital market. While we are encouraging new listings, investor protection will remain a core obligation in all policy decisions,” he said.
The meeting focused on the use of IPO proceeds, particularly whether companies should be allowed to utilise the funds for repaying loans or making new investments.
It brought together key stakeholders from across the financial and corporate sectors.
Maqsood stressed the importance of stronger coordination among market institutions and said initiatives are underway to improve governance and bring fundamentally sound companies to the stock market.
Business leaders at the event urged the regulator to allow more flexibility in using IPO proceeds for debt repayment.
Syed Nasim Manzur, Managing Director of Apex Footwear and a member of the Private Sector Advisory Council, said most global markets do not restrict companies from using IPO funds to settle loans, suggesting Bangladesh should align with international practices.
However, Tapan Chowdhury, Chairman of Central Depository Bangladesh Limited (CDBL) and Managing Director of Square Group, advised caution.
He said authorities must carefully assess whether such repayments genuinely benefit companies, warning against clearing loans tied to overly ambitious projects based solely on corporate reputation.
Abdul Hai Sarker, Chairman of the Bangladesh Association of Banks (BAB) and Dhaka Bank PLC, highlighted the broader economic importance of a strong capital market for ensuring competitiveness and long-term growth.
Mashrur Arefin, Chairman of the Association of Bankers Bangladesh (ABB) and Managing Director of City Bank PLC, supported allowing companies to restructure capital using IPO proceeds, particularly for productive or expansion-related loans.
He added that, with proper safeguards, even rescheduled loans could be considered under current economic conditions.
Riyad Mahmud, President of the Bangladesh Association of Publicly Listed Companies (BAPLC), also backed a more flexible approach, noting that even well-performing firms may carry rescheduled debt due to global shocks.
Dhaka Stock Exchange (DSE) Chairman Mominul Islam said companies should be permitted to use IPO funds for loan repayment where it provides real benefit, but emphasised the need for strict verification beyond basic disclosures.
Kamran T Rahman, President of the Metropolitan Chamber of Commerce and Industry (MCCI), pointed out a structural mismatch in financing, where long-term projects are often funded by short-term deposits.
He called for policy alignment to channel more long-term financing through the capital market.
The discussion also touched on bond market development, long-term financing, and corporate governance reforms.
BSEC Commissioners Md Mohsin Chowdhury, Md Ali Akbar, and Md Saifuddin were also present.
