The newly appointed Chairman of Securities and Exchange Commission (SEC) Mr. Faruq Ahmad Siddiqi visited the Dhaka Stock Exchange (DSE) on April 05,2006. He held a meeting with the Directors of the DSE. It was the first visit to the DSE by the SEC Chairman after assuming office in the middle of March, 2006. The DSE Directors made a plea to the SEC Chairman for framing market-friendly policies to develop the country's stock market. The SEC Chairman was told that the stock market has been affected since late 2005 due to liquidity crisis in the money market. The Bangladesh Bank raised its Statutory Liquidity Ratio (SLR) to 18 per cent which encouraged both institutional and individual investors to sell their stocks in the market. The DSE directors demanded resumption of share trading on Saturdays, extension of the June, 2006 deadline to convert the brokerage houses into corporate entities by another one year, reintroduction of quota system in initial public offerings (IPOs) and suspension of the SEC order to ensure deposit of hundred per cent fund ahead of trade confirmation. On the IPO distribution system, the SEC Chairman was told that big investors are being discouraged to invest in the stock market under the existing system which allows allotment of a whopping 80 per cent shares among the small investors.

The existing system is only benefiting the investors who prefer short-term gain affecting the stability of the market. The present system has allowed the investors taking away a much more liquidity against their investment in the primary market taking a toll on the overall stock market. Re-introduction of a balanced quota system in the IPO allotment procedure can only end this nagging crisis, the DSE Directors said. Non-resident Bangladeshis should also be attracted to invest in mutual funds and pension funds. Explaining the reasons for opening trading on Saturdays, the DSE members said their business is being seriously affected by two days weekly holidays. "Our daily turnover marked a significant fall in recent days and without doing business for six days, the losses cannot be compensated," the DSE commented. Institutional investors like banks and financial institutions play an important role in keeping the market vibrant. But they are not putting money in the market nowadays because of liquidity crisis, the SEC Chairman was told. DSE President Mr. Abdullah Bokhari, Senior Vice-President Mr. Ahmad Rashid SEC Members, Executive Directors, were present, among others at the meeting. The SEC Chief held another meeting with the former chairmen and senior Members of the DSE on the same day. Former Chairmen Mr. Khurshid Alam, Mr. Md. Rakibur Rahman, Mr. Ahmed Iqbal Hasan and senior members were present in the meeting.