The Bangladesh Securities and Exchange Commission (Bsec) has appointed a seven-member interim board to manage the Capital Market Stabilisation Fund (CMSF), ending a 26-month period without leadership. The move is part of the regulator’s plan to transition the fund from its current rules-based framework to governance under a dedicated law.
The CMSF, established in 2021, holds approximately Tk1,700 crore, consisting of Tk900 crore in cash and Tk800 crore in listed stocks. The fund comprises undistributed dividends, unclaimed shares, and other investor assets that remain with listed companies. The previous board’s term expired in 2024, leaving the fund without formal oversight for more than two years.
Bsec Chairman Masud Khan will oversee the interim Board of Governors, which includes Bsec Commissioner Hossain Sadat, an additional secretary from the Financial Institutions Division (pending ministry nomination), Institute of Chartered Accountants of Bangladesh President Sabbir Ahmed, Bangladesh Association of Publicly Listed Companies President Riad Mahmud, Dhaka Stock Exchange Managing Director Nuzhat Anwar, and the CMSF chief executive officer, who will serve as member secretary. The interim board’s role is to ensure the fund’s continuous operation until the proposed Capital Market Stabilisation Fund Act, 2026, is passed by parliament.
The regulator is advancing the new legislation following concerns raised by Bangladesh Bank about the fund’s legal foundation for holding unclaimed investor dividends and other assets. A joint committee comprising Finance Ministry officials and Bsec representatives initially suggested dissolving the CMSF and transferring its assets to the government treasury. However, Bsec argued that these resources should be reserved exclusively for the benefit of investors. As a result, the decision was made to replace the current regulatory framework with a statutory law.
The draft legislation would broaden the CMSF’s mandate to include management of undistributed dividends, rights shares, unallotted subscription money from initial public offerings and qualified investor offerings, and assets of delisted companies. The fund would serve as custodian of these assets and settle eligible claims indefinitely, allowing lawful heirs to claim assets through established procedures. The law would also provide for a centralized system of dividend distribution and tax deducted at source (TDS) management.
Additionally, the proposed law would permit the CMSF to use its resources for investor education, institutional capacity building, research, and training—areas that contribute to the overall development of Bangladesh’s capital markets.
Currently, the CMSF operates under the Capital Market Stabilisation Fund Rules, 2021. These rules allow the fund to invest up to 40% of its cash holdings in listed securities, allocate at least 50% for refinancing loans to market intermediaries for margin lending, and invest up to 10% in fixed deposits, government securities, mutual funds, and other permitted instruments.
The interim board is tasked with completing all necessary compliance requirements while adhering to applicable laws, rules, and directives as the new legislation undergoes stakeholder consultation and parliamentary review.