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MARKET PULSE 

FEB-2018

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written approval of LankaBangla Securities Limited.

Provided that the Commission may, from 
time to time, issue any order or direction 
under this Rules for the purpose of 
directing or controlling the activities of 
the market maker, which the market maker 
and its designated client, exchange and the 
issuer of the authorized securities or its 
fund or asset manager shall comply with 
and be compelled with the procedure. 

Power to Render Exemption 

1. Commission may exempt any person 

in writing from this rule and duties 
based on the voluntary decision by 
the commission or by an application 
made by any person to the commission 
considering the public interest and 
reasonable reasons and hence for the 
interest of the capital market.

2. For the fulfillment of the purpose of 

this Rule, following the rule stated in 
clause (1), the Commission may also 
exempt from any other law or rule or 
order as it deems fit.

Punishment

Under this rule, if any person violates 
any law, rule, sub-rule, order or order or 
any conditions mentioned in this Rule, 
the Commission has the right to take any 
punitive actions in applicable cases as per 
law or ordinance.

Repealed

Bangladesh Securities and Exchange 
Commission (Market Making) Rules, 
2000 is repealed and further Bangladesh 
Securities and Exchange Commission 
(Market Making) Rules, 2017 is enacted.

Need for Market Maker for 

ETF Launch in Bangladesh 

The role of market maker is a must 
for launching operations of Exchange 
Traded Fund in Bangladesh’s Stock 
Exchanges. The Bangladesh Securities 
and Exchange Commission body 

recently submitted the inception report 
on ETF to the commission insisting the 
necessity of having market makers. The 
Dhaka Stock Exchange in October 2014, 
in an initiative to launch two ETFs by 
December 2014, had proposed to the 
capital market to allow the bourse to 
launch ETFs without having a market 
maker. The role of market maker is to 
offer bid and ask prices and provide 
enhanced liquidity for ETF units to 
allow investors to transact at almost 
any time during the trading hours. DSE 
in its proposals on ETF formation also 
stressed the necessity of having market 
makers. An ETF is like a mutual fund 
that tracks an index, a commodity or 
a basket of assets like an index fund, 
but trades like a stock on an exchange. 
The two ETFs will be formed based on 
DS30, the blue-chip index of the DSE, 
and DSES, its Shariah index.

In the finalized rules, the minimum capital requirement for becoming a market maker has been lowered to Tk 10 crore from 
Tk 50 crore proposed in the draft rules.

Market makers are entitled to keep prices of shares within a certain range through buying and selling based on fundamentals 
of companies depending on market situation.

 As per the finalized rules, stockbrokers and stock dealers would only be entitled to act as market maker.

 A market marker with a paid-up capital of just Tk 10 crore, however, would be allowed to act for the service for only one 
listed securities. To be market maker for more than one listed securities, stockbrokers or stock dealers will have to increase 
their paid-up capital proportionately.

An entity would be allowed to be market maker for highest five authorized securities at a time.

The commission in the finalized rules also increased short selling limit for a market maker to 30%, meaning that a market 
maker of a listed securities would be allowed to make 30% short selling of its total sales on a particular securities in a day.

The stock exchanges will set procedures for automatic settlement and execution of short selling of securities that will be 
done by the market makers.

Major Highlights of the Law