Direct listing introduced as alternative route to stock market listing: BSEC
Graphics: Agamir Somoy
The Bangladesh Securities and Exchange Commission (BSEC) has taken an initiative to introduce direct listing as an alternative to initial public offering (IPO) for companies seeking to be listed on the stock market. Established companies that do not need new capital will be able to get listed through the offloading of shares held by existing shareholders. Direct listing could create an alternative opportunity for established companies that do not need to raise new capital for business expansion or operations but are interested in getting listed on the stock market by offloading shares held by existing shareholders.
The BSEC disclosed the information in a press release sent on Wednesday.
The BSEC said it has drafted the Bangladesh Securities and Exchange Commission (Direct Listing of Securities on Stock Exchanges) Rules, 2026 for this purpose. The draft has been published for public comments. The rules will be published in the form of a gazette and made effective very soon. Under the proposed direct listing system, a company will not raise capital by issuing new shares itself. The company will be able to get listed on a stock exchange by offloading shares held by existing shareholders. As a result, an alternative listing route will be created for established companies that do not need new funds to operate or expand their businesses.
The BSEC said the system will create an opportunity to increase the participation of new and capable companies in the stock market. At the same time, existing shareholders will have an opportunity to offload their shares. This could increase the depth and scope of the stock market. However, companies will have to meet specific eligibility requirements for direct listing. According to the proposed rules, eligible companies will be able to apply for listing under this system. This means the opportunity will not apply to all companies in the same way.
Meanwhile, the IPO route will remain available for companies seeking to raise new capital. Companies currently interested in raising capital from the stock market through an IPO will have to apply under the existing Bangladesh Securities and Exchange Commission (Public Offer of Equity Securities) Rules, 2025.
The commission has advised companies that have already applied for an IPO or are interested in applying not to suspend or delay their applications while waiting for future changes to the rules. If any reforms, changes or relaxations are introduced to the IPO related rules later, companies that have already applied will also be brought under those benefits where applicable.
According to the BSEC, separating listing opportunities according to companies' needs could increase the participation of good and capable companies in the stock market. When new capital is needed, companies can use the IPO route. When new capital is not needed, they can use direct listing through the offloading of existing shares. These two routes will expand listing opportunities for companies. Policy and regulatory reform efforts will continue to increase the participation of good and capable companies in the stock market and build a deep, diverse, transparent and effective market.
