Govt moves for new law to secure capital market, investors
Photo: BSS.
The government has taken an initiative to enact a law aimed at ensuring stability in the capital market and protecting the interests of investors. A draft of the "Bangladesh Capital Market Stabilization Fund Act, 2026" has already been prepared.
According to sources at the Financial Institutions Division, the draft law has been formulated to further protect the interests of investors in the capital market, transform the Bangladesh Capital Market Stabilization Fund (CMSF) into a more effective and self-sufficient institution, and ensure transparency and accountability in the management of unutilised cash dividends, shares, and other financial assets.
The draft of the proposed CMSF Act, 2026 has been published by the Financial Institutions Division. It is currently in the stage of review and policy-level scrutiny at the Ministry of Finance.
Stakeholders associated with the capital market have said that if the proposed law is enacted, the CMSF will have the opportunity to function as a modern cash dividend distribution centre in Bangladesh's capital market. This could pave the way for making the cash dividend distribution process of listed companies more digital, transparent, and centralised.
Sector insiders also said that investors will be able to obtain full tax challans and tax deduction certificates for taxes deducted at source on dividends received in a financial year from a single platform. This will simplify tax-related formalities and enhance transparency.
The draft law proposes establishing the CMSF as a statutory body. At the same time, initiatives have been taken to bring the fund's operations, asset management, administrative structure, governance, supervision, and accountability under a legal framework.
The proposed law states that various financial assets, including cash dividends that have long remained unutilised, bonus shares, rights shares, refund money, and unpaid amounts from IPOs and Qualified Investor Offers (QIOs), will be managed under the CMSF. The original owners or their heirs will have the opportunity to file claims through a prescribed process and, after verification, receive their assets back.
The draft law includes provisions for forming a governing board to manage the fund. The board is proposed to include a Chairman, a representative of the Commission, representatives from various financial and capital market-related institutions, and independent members. At the same time, the fund's day-to-day operations will be conducted under the leadership of a Chief Executive Officer.
The proposed law further states that the CMSF's funds may be used to maintain capital market stability, protect investors' interests, and—subject to the Commission's approval—be invested in safe and permitted sectors. The fund will also be obligated to maintain audits, preserve accounts, publish annual reports, and disclose necessary information.
The draft law also includes provisions for punitive measures in cases of violation of prescribed regulations, concealment of information, provision of misleading information, and misuse of fund-related assets. Additionally, it proposes to repeal the existing Bangladesh Securities and Exchange Commission (Capital Market Stabilization Fund) Rules, 2021 and bring the new law into effect.
Stakeholders believe that if the proposed law is enacted, the CMSF's operations will be further strengthened, good governance of unutilised investor assets will be ensured, and it will play a positive role in boosting investor confidence in the country's capital market.
In this regard, Md. Wasi Azam, Additional Director of the CMSF's Operations Division, told the state-run news agency BSS: "If the proposed law is implemented, the CMSF will have the opportunity to function as a modern cash dividend distribution centre in Bangladesh's capital market. This could pave the way for making the cash dividend distribution process of listed companies more digital, transparent, and centralised."
He added: "Investors will be able to obtain full tax challans and tax deduction certificates for taxes deducted at source on dividends received in a financial year from a single platform. This will simplify tax-related formalities and enhance transparency."
