BSEC approves six brokers for commodity derivatives trading
The Bangladesh Securities and Exchange Commission (BSEC) has approved six brokerage firms to participate in commodity derivatives trading as Bangladesh prepares to introduce the new investment instrument in the first quarter of 2027.
The approvals were given at the regulator’s 1,035th emergency commission meeting on Monday, according to a press release.
The six firms are Sohel Securities Limited, Island Securities Limited, NLI Securities Limited, Be Rich Limited, PHP Stocks & Securities Limited and UCB Stock Brokerage Limited. Their applications were submitted following recommendations from the Chittagong Stock Exchange (CSE), which is preparing to launch the trading system.
BSEC spokesperson and Executive Director Md Abul Kalam told Daily Waadaa that the regulator expected to introduce commodity derivatives in the first quarter of 2027.
“We believe we will be able to introduce commodity derivatives in the first quarter of 2027. We will also issue another licence soon in addition to these six,” he said.
AKM Habibur Rahman, chairman of the CSE, said the exchange had completed its technological and infrastructural preparations but needed more licensed brokerage firms before trading could begin.
“Our technology and infrastructure are ready. We need 30 brokers, but we have received licences for only six. We need more brokers. After that, we will need approval for three products,” he said.
He said the CSE had already applied for approval to introduce contracts for gold, silver and crude palm oil. The exchange would also need approval for the contracts before it could launch derivatives trading.
The CSE received regulatory approval to introduce commodity trading in October 2023, but the launch has been delayed as the exchange works to complete the necessary regulatory and market preparations.
Commodity derivatives are financial contracts whose value is linked to the price of an underlying commodity, such as gold, silver, crude oil or agricultural products. Investors can use them to hedge against price fluctuations or speculate on future price movements without necessarily buying or handling the physical commodities.
The introduction of commodity derivatives is expected to expand investment opportunities, diversify Bangladesh’s capital market and increase trading activity. Investors can currently invest in equities, mutual funds, government treasury bonds, debentures and corporate bonds in the country’s capital market.
Investor compensation
At the same meeting, the BSEC decided to direct the Dhaka Stock Exchange (DSE) to compensate investors affected by the alleged embezzlement of funds by brokerage firms, using the DSE Investors’ Protection Fund.
According to the information provided for the report, the decision covers claims involving several brokerage firms, including Mosharraf Securities, Banko Securities, Tamha Securities, Crest Securities and Shah Mohammad Sagir Securities.
Compensation is capped at 5 lakh taka per affected investor, subject to applicable conditions and the settlement process.
The move is intended to help affected investors recover part of their lost funds through the investor-protection mechanism.