Bashundhara Group – one of the leading conglomerates in Bangladesh – has been denied permission by the market regulator to establish a private commodity exchange.
In May this year, ABG Limited – a newly formed company of the group – applied to the Bangladesh Securities and Exchange Commission (BSEC) seeking its permission to set up ABG Commodity Exchange (ABGEX).
In mid-September, the BSEC decided not to allow the conglomerate to move forward with its plan.
"As we already have two stock exchanges in the country, we will not give permission to establish a commodity exchange in the private sector," BSEC Chairman Professor Shibli Rubayat-Ul-Islam told The Business Standard.
"Either Dhaka or Chattogram stock exchange will set up a commodity exchange. We have already asked the Chittagong Stock Exchange (CSE) to start working to this end."
In October last year, the port city bourse secured BSEC's nod to establish and operate a commodity exchange, which is the first ever of its kind in the country.
Later, the CSE and Multi Commodity Exchange (MCX) signed an agreement to establish an automated and structured commodity exchange in Bangladesh.
The CSE is working to launch the platform with a number of products.
A commodity exchange is an organised marketplace where buyers and sellers come together to purchase and sell enforceable contracts to deliver a commodity such as wheat, gold, or cotton or a financial instrument such as foreign currencies at some future date.
Earlier, in March this year, the Bashundhara Group applied to the commerce ministry to set up a private marketplace featuring barter, auction, warehousing, and securities transactions alongside regular business-to-business and business-to-person trading of all kinds of goods.
The group applied for seeking approval for its global marketplace named "ABG Marketplace".
ABG Limited is also keen to become a strategic partner of the CSE. After getting the proposal, the stock market regulator and the CSE are working on the proposal.
The company will buy 25% shares of the CSE as a strategic partner, according to sources.