BSEC Mega Plan: T+1 Settlement, AI Surveillance, Mandatory Listing for Large Firms

TBS Report, Dhaka — The Bangladesh Securities and Exchange Commission (BSEC) has unveiled an ambitious roadmap to rescue the country's capital market from a decade of stagnation, promising to dismantle the "analog" hurdles of the "paper age" and transition into a technology-driven institutional powerhouse — the most comprehensive capital market reform vision articulated in recent years.

Speaking at an open discussion titled "The Current State of the Bangladesh Capital Market and Way Forward", organised by the DSE Brokers Association of Bangladesh (DBA) at DSE Tower on 31 August 2026, BSEC Chairman Masud Khan outlined a "Mega Plan" featuring digital share trading, T+1 settlement, AI-powered surveillance, and mandatory market participation for large companies.

📊 Identifying the Core Challenges

Masud Khan identified the major challenges facing the Bangladesh capital market:

• 📉 IPO drought — persisting since 2024
• 📉 Liquidity crunch — constrained market depth
• 📉 Lack of investor confidence — retail-dominated, rumor-based environment
• 📉 Analog processes — paper-based trading creating scope for fraud
• 📉 Regulatory burden — excessive queries to listed companies

The regulator aims to shift the market from a "retail-dominated, rumor-based" environment to one driven by professional analysis and valuation — a structural transformation that requires simultaneous reforms across trading infrastructure, listing rules, surveillance, and market participant behaviour.

🏛 Market-Friendly Government Context

Masud, who has 46 years of corporate leadership experience, said the current government is perhaps the most market-friendly in Bangladesh's history. He cited the FY2026-27 budget's market-oriented measures, particularly the treatment of the 15% tax on individual dividend income as a "final tax liability" — a structural change designed to encourage informed investment rather than herd behaviour.

Reflecting on his first two months at the regulator, Masud said the removal of the floor price on his second day in office was a pivotal step towards restoring free-market dynamics. He also highlighted two international credibility milestones:

• 🌏 MSCI Bangladesh Index: Morgan Stanley Capital International has decided to resume publishing the Bangladesh Index from November 2026
• 🌏 Beximco Pharmaceuticals GDR: resolution of the London Stock Exchange GDR listing issue within a month of his tenure

These international credibility milestones could encourage other large local companies to pursue global listings — opening new capital channels for Bangladeshi corporations.

💻 Trading to Go Fully Digital

Masud described the current system of using physical documents for buy and sell orders as a "horror story", saying it creates scope for signature forgery and fund misappropriation. The digital transformation agenda includes:

• 💻 Digital order placement through mobile apps — aligning with global practices
• 💻 Digitised internal file management at BSEC
• 💻 IAS 34 adoption — allowing "condensed" quarterly reporting
• 💻 Reduced regulatory queries — easing compliance burden on listed companies

💰 Easier IPO, Direct Listing

Addressing the IPO drought that has persisted since 2024, Masud said the existing public-issue rules are discouraging entrepreneurs from entering the capital market. The reform agenda includes:

• 💰 Direct-listing rules overhaul — previously restricted to government companies, now opened to all companies including large multinationals and profitable local firms
• 💰 Mandatory offloading reduced from 25% to 10% — lowering the entry barrier for new listings
• 💰 "Hybrid" capital-raising model — combining IPO and direct listing, with potential approval within 7 days for fundamentally strong companies
• 💰 Public Interest Entities (PIEs) rules — bringing companies using Tk 300 crore+ in public funds into capital market
• 💰 Multinational branch registration — potential new law requiring major MNC branches like Standard Chartered and HSBC to register as local companies and eventually list on DSE

⚡ T+1 Settlement and AI Surveillance

BSEC is moving towards a T+1 settlement cycle, with a long-term goal of T+0 (same-day settlement). Masud said he is in discussions with Bangladesh Bank to extend Real-Time Gross Settlement (RTGS) hours to facilitate the cash side of stock transactions — a critical infrastructure prerequisite for shorter settlement cycles.

He also gave the Dhaka Stock Exchange (DSE) one year to shift its surveillance department to an AI-based automated system. The system would use automatic triggers to detect and halt suspicious trading, reducing human intervention and potential bias — a major upgrade from the current manual surveillance approach that has struggled to keep pace with sophisticated market manipulation patterns.

Masud called on market stakeholders to support the reforms, saying BSEC would not intervene in price levels but would remain focused on ensuring a fair, transparent, and internationally compliant market.

🏛 DSE Reforms: Bond Listing Fee Cut

DSE Managing Director Nuzhat Anwar and Chairman Mominul Islam expressed support for coordinated reforms. Mominul said the DSE board had reduced listing fees for bonds by up to 80% to encourage fixed-income trading on the main board — a critical step in developing Bangladesh's bond market, which has historically been underdeveloped relative to the equity market.

He also said the DSE is working to resolve the long-standing issue of investors whose funds are trapped in closed brokerage houses, estimating that 95% of affected investors would be repaid in full by the end of 2026 — addressing one of the longest-standing investor confidence drags on the market.

👥 BAPLC Calls for Industrial Survival Support

Riad Mahmud, President of the Bangladesh Association of Publicly Listed Companies (BAPLC), urged BSEC to act as a "vanguard" for listed companies. He said the worsening energy crisis is now a direct threat to industrial survival and called for:

• 💰 BSEC and Bangladesh Bank coordination on working-capital financing for listed companies
• 💰 Priority financing for listed companies to protect production and jobs
• 📜 Legal barrier removal preventing stronger corporate groups from taking over sick or non-operational listed companies

The BAPLC's intervention reflects the broader pressure that the gas and power crisis is placing on listed industrial companies — with many facing production disruptions that threaten their ability to service debt, pay dividends, and maintain market listings.

📊 Strategic Implications for Bangladesh Capital Market

The BSEC Mega Plan carries far-reaching strategic implications:

• ✅ Modernisation signal — the most comprehensive capital market reform vision in a decade
• ✅ International credibility — MSCI Bangladesh Index resumption + Beximco GDR resolution
• ✅ Investor protection — AI surveillance should reduce market manipulation
• ✅ Liquidity enhancement — T+1 settlement reduces capital lockup in trades
• ✅ Market deepening — direct listing and PIE rules expand listed company universe
• ⚠️ Implementation risk — the 1-year AI surveillance timeline is ambitious
• ⚠️ Energy crisis overhang — listed companies need production stability to benefit from market reforms

The success of the Mega Plan will depend critically on coordinated execution across BSEC, DSE, Bangladesh Bank (for RTGS hours and working capital support), and the listed company community. If the reforms are implemented as outlined, the Bangladesh capital market could emerge from FY27 with materially improved infrastructure, expanded listed company universe, and stronger investor protection — providing a critical complement to the broader macroeconomic stabilisation narrative as the country navigates the LDC graduation transition beginning November 2026.