From now on, all listed leasing, finance, and insurance companies will have to provide information on their stock investment exposure to the stock market regulator on a monthly basis.
The Bangladesh Securities and Exchange Commission (BSEC) has asked the Dhaka and Chattogram bourses to collect the information from the companies and submit compiled reports to it by the first seven days of every month.
Usually, non-banking financial institutions (NBFI) can invest up to 25% of their paid-up capital and reserve to acquire shares of financial entities, agricultural business entities, or industry-related entities.
Insurers are also allowed to invest 25% of their investable funds and life funds in potential listed instruments.
Now, the commission will collect the information on the stipulated sectors as these sectors play an important role in the capital market.
In order to bring the investments under close monitoring, the Bangladesh Bank has recently specified the NBFIs investment components which would be considered their capital market investments.
The Financial Institutions Act has specified the NBFIs' investments limit in shares of other companies, but it does not specify which investment components would be considered their capital market investments.
There are 23 NBFIs and 53 insurers listed on the capital market.
BSEC Commissioner Shaikh Shamsuddin Ahmed said the commission has recently taken several initiatives to increase fund flow to the capital market.
The regulator will look into the information on all the listed leasing, finance, and insurance companies' investment exposure to the capital market so that the firms can play an important role here, he added.
Sultan-ul-Abedin Mollah, a former member of the Insurance Development and Regulatory Authority (Idra), said insurers can invest up to 25% in the capital market of their investable funds, especially life funds.
They are allowed to invest in fundamental companies that have future values, he added.
The Dhaka Stock Exchange and the Chittagong Stock Exchange will collect information from the listed firms and submit compiled reports to the commission by the first seven working days of every month.