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BB refutes BSEC statement on disputed issues

Bangladesh Bank today refuted the Bangladesh Securities and Exchange Commission's (BSEC) statement on Tuesday that two issues on which the two regulators had a dispute on had been resolved through a meeting that day.

No decision was taken in Tuesday's meeting to bring changes to Bangladesh Bank's previous orders, said the central bank.

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What is more, the stock market regulator was requested to bring changes to its previous notifications, said the central bank in a press release.

Of the two issues of dispute, one was over the participation of banks and non-bank financial institutions (NBFIs) in a BSEC capital market stabilisation fund, directed by the BSEC.

The other was over a BSEC order allowing dividends from the profits of the recent financial year even if there were accumulated losses.

On Tuesday, BSEC Commissioner Shamsuddin Ahmed led a three-member BSEC team at the meeting in the central bank headquarters, while the host side was led by Deputy Governor AKM Sajedur Rahman Khan.

"In the meeting, we informed the stock market regulator that the two issues cannot be allowed as these are illegal so the BSEC was requested to bring necessary amendment in its notifications," the BB said in the press release.

The market exposure issue of banks and NBFIs was also discussed in the meeting. From the central bank side, it was made clear to the BSEC that there was legal limitation to relaxing the exposure.

"But, no decision was taken yet on any topics," said the central bank.

Earlier, BSEC Commissioner Ahmed told The Daily Star that the central bank had agreed to consider the market exposure of banks and NBFIs on the basis of the cost value of their investments in the stock market instead of the market value of the shares.

The BB had also agreed to allow the lenders to exclude their bond investments from the calculation of the exposure, he said.

Taking into account the BSEC commissioner's statement, the stock market investors became optimistic, leading to a rise of the market.