The Bangladesh Securities and Exchange Commission should increase its monitoring over activities of sponsors and directors of listed companies as they (directors) often lead market manipulation, said experts at a seminar on Saturday.
BSEC chairmen M Khairul Hossain presided over the seminar ‘Promoting investor protection in Bangladesh through good governance and regulatory measures’ organised by the Bangladesh Institute of Capital Market at its office in Dhaka as part of World Investor Week-2017 which ends today.
The surveillance and enforcement systems of the regulatory body should be widened to scan ‘wrongdoing’ attempts of sponsors and directors of the companies, said IDLC Finance managing director Arif Khan.
He said that investors should be well informed about the company’s accounting information instantly.
‘The risks associated with capital market investment could be minimised by introducing better companies and raising institutional investments at the market,’ he also said.
BICM associate professor Nitai Chandra Debnath said in a paper that proportion of independent director might be increased up to 50 per cent for family controlled firms and if chairman is not an independent director. In other situations, it may be one-third, he said.
According to the revised corporate governance guidelines of the BSEC, one-fifth of the total number of directors in the company’s board will be independent directors, he said.
The amended bank companies act allowed more representation in board from a single family with increased tenure, he said.
Nitai said to ensure better corporate governance, a company needs a board which will exercise its due diligence while discharging fiduciary and statutory function.
He said the BSEC has to employ some qualified people who have expertise on Bangladesh Financial Reporting Standards and Bangladesh standard on Auditing.
‘If the BSEC categorises the list of auditors according to their specialisation, we may have more transparent report,’ he said in the paper.
The investors of the capital market are not well aware of their rights and risks due to lack of education and knowledge related to investment at the capital market, Nitai added.
The BSEC chairman said, ‘Investors need proper financial education and knowledge before investing at the capital market to reduce risk of losing their investments.’
‘The commission is working hard to diversify products that will lessen the investment risks,’ he said.
BSEC commissioner Swapan Kumar Bala, DSE Brokers Association of Bangladesh president Ahmed Rashid Lali and BICM executive president Abdul Hannan Zoarder also spoke at the event.
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