SEC gets new chairman

FE Report

The government Sunday appointed M Khairul Hossain as the chairman of the Securities and Exchange Commission for three years in an effort to bring stability to the capital market.

Mr. Hossain quit his position as the chairman of the state-owned investment bank, Investment Corporation of Bangladesh, and professor of finance at Dhaka University in the afternoon and took helm of the regulator later in the day.

The market greeted his appointment with aplomb, as the benchmark Dhaka Stock Exchange General (DGEN) Index climbed 175 points or 3.12 per cent - the highest one-day gain in more than two months.

A finance ministry order to this effect was issued in the morning. As the news of the appointment reached the Motijheel commercial area, it lifted the gloom in the market, propelling the DGEN to three-weeks high.

Mr. Hossain replaces Md Ziaul Haque Khondker, who has been transferred to Ministry of Public Administration. It was not clear whether he would be retained as a government servant.

Khondker's nearly two years reign as the chief capital market regulator came to an ignominious end after he was accused of incompetence and failing to protect the interest of small investors during the recent stock crash.

A probe committee headed by a former deputy governor of the Bangladesh Bank has recommended that the commission headed by Khondker should be recast to restore credibility of the regulator.

Finance Minister A M A Muhith last week vowed to bring competent persons to the Commission. He told the FE Saturday that the government would not interfere in the regulator's work once a new chairman is named for the SEC.

Last week SEC members Mohammad Anisuzzaman and Muhammad Yasin Ali resigned in a space of one day, paving the way for recasting of the Commission in line with the government's pledges.

Late last month Chittagong University professor Helaluddin Nizami was appointed as a member of the regulator. Two more members are expected to be named within days.

Talking over as the new chairman of the regulator, Mr. Hossain vowed to stabilize the stock market by initiating new reforms and amending some of controversial securities laws.

"Insalllah (God willing), the confidence of investors will be restored soon. They have nothing to worry as we are going to embark upon a series of reforms in the Commission soon," Hossain told the FE.

He said the new SEC leadership would identify the problems that caused the market to shed nearly 50 per cent between December and February. "Our first priority will be to boost market confidence."

"We want to strengthen the base of the stock market so that it can play an effective role in the economy," he said.

The new SEC chairman told reporters that an "effective coordination" will be established between the SEC and the Bangladesh Bank and the decision making process of the regulator would be made "transparent and accountable."

He said the regulator will launch awareness campaign to educate the country's three million plus investors about the basics and nuances of stock trading and investment.

Asked, whether his previous organisation--- ICB--- will get extra favor from him, he answered in the negative and vowed to uphold the spirit of his teaching profession through ensuring fair and just treatment for all.

"All the stakeholders of the stock market will be treated equally," he said.