BSEC Boosts Broker Oversight to Battle Fraud

To strengthen investor protection and prevent financial fraud in the capital market, the Bangladesh Securities and Exchange Commission (BSEC) has mandated that all brokerage firms operate under an integrated and immutable back-office software system. The announcement came from BSEC Chairman Khondoker Rashid Maksud during the inaugural ceremony of World Investor Week 2025, held at the BSEC headquarters in Agargaon, Dhaka, on Monday, 6 October, at 3:30 PM.

This year’s global observance of World Investor Week, initiated by the International Organization of Securities Commissions (IOSCO), is being marked under the theme:
“Risks to Technology and AI-Based Financial Trading, Data Protection Breaches, and Fraud Prevention — All Are Key to Investor Protection.”
BSEC has chosen to highlight “Fraud and Scam Prevention” as its core focus for the week.

As part of the week-long observance, a joint online seminar will be held on Wednesday, 7 October, organized by the Dhaka and Chittagong Stock Exchanges, the DSE Brokers Association (DBA), and the Bangladesh Merchant Bankers Association (BMBA). While panelists will be present physically at the DSE office, representatives from brokerage firms and merchant banks will join virtually via Zoom.

In a press release issued late Monday evening, BSEC confirmed that the event was presided over by Chairman Khondoker Rashid Maksud, with Attorney General Md. Asaduzzaman as chief guest. The keynote paper was jointly presented by Yawar Sayeed and Barrister Mohammad Zisan Haider, both members of a BSEC-formed investigation committee. Yawar Sayeed also delivered a primary thematic address as a financial sector expert.

A panel discussion moderated by Executive Director Mir Mosharraf Hossain Chowdhury featured participants including BSEC’s Ripon Kumar Debnath, DSE Chief Regulatory Officer Mohammad Shafiqul Islam Bhuiyan, and Barrister Karishma Jahan. The event was attended by the chairmen and managing directors of both stock exchanges, CEOs of the top 10 brokerage firms, DBA representatives, and senior BSEC officials.

In his speech, BSEC Chairman Khondoker Rashid Maksud stated:

“The Bangladesh Securities and Exchange Commission is working to unify the Bangladesh Securities and Exchange Commission Act, 1993 and the Securities and Exchange Ordinance, 1969 into a single comprehensive legal framework.”

He emphasized the Commission’s commitment to transparency and accountability, adding:

“To curb market manipulation and fraud, the current Commission promptly formed an Inquiry and Investigation Committee after taking office. Of the 12 reports submitted, punitive actions have already been taken in seven cases.”

However, he noted that enforcement of some recommendations has been delayed due to pending writ petitions and stay orders from the courts, for which he sought support and cooperation from the government and judiciary.

The BSEC Chairman further shared updates on ongoing structural reforms and sustainable development initiatives in the capital market.

“Efforts are underway to streamline the roles and responsibilities of trustees, custodians, and asset managers to enhance the mutual fund sector. In addition, the Commission is working to ensure accountability among independent directors in listed companies to promote good governance,” he said.

He reiterated BSEC’s fraud-prevention efforts by announcing:

“All brokers have now been brought under an integrated and unalterable back-office software system to prevent misappropriation of funds through fraudulent activities.”

He concluded by calling on all stakeholders to cooperate in building a more robust, transparent, and sustainable capital market in Bangladesh.

Earlier in the event, BSEC Commissioner Md. Ali Akbar, in his welcome remarks, said:

“As with every year, this year’s World Investor Week is being observed with the overarching theme of ‘Technology and Digital Finance, Artificial Intelligence, and Fraud and Scam Prevention.’ BSEC has selected ‘Fraud and Scam Prevention’ as its focal theme for 2025.”