Dhaka: The Dhaka Stock Exchange (DSE) is set to introduce derivative products in the capital market by January 2028, as outlined during a recent event at the DSE Tower. Regulators emphasized the necessity of a functional Central Counterparty (CCP) and an enhanced risk-management framework for this initiative.
According to United News of Bangladesh, Bangladesh Securities and Exchange Commission (BSEC) Commissioner Nafeez Al Tarik highlighted that the absence of an effective CCP could hinder the launch of derivative operations. He stressed the importance of enhancing the capacities of brokers, traders, and other market participants alongside the necessary technological infrastructure. International experience suggests that derivatives are crucial for managing portfolio risks, hedging exposure, and addressing market liquidity and volatility risks.
Nafeez stated that achieving the goal requires coordinated efforts between the commission, exchanges, Central Counterparty Bangladesh Limited (CCBL), and other market stakeholders. The objective is to establish the necessary rules, infrastructure, and capacity within the set timeline.
DSE Managing Director Nuzhat Anwar emphasized that introducing new financial products represents a significant step in developing the country’s capital market. She expressed gratitude to the BSEC for its support and guidance, noting that a specific roadmap and timeline have been established in collaboration with the commission. The initiative will progress in phases, incorporating feedback from stakeholders. Nuzhat also mentioned plans for workshops and awareness programs on the subject.
BSEC Executive Director Abul Kalam pointed out that financial derivatives, particularly cash-settled index derivatives, could be introduced relatively easily. However, successful implementation depends on a robust regulatory, technological, clearing, settlement, and risk-management framework. Updates to the existing Exchange Derivatives Rules are planned to establish the necessary regulatory framework. Additionally, a suitable trading platform, CCP, real-time margining, position monitoring, and mark-to-market systems will be implemented. Progress on preparations will be regularly monitored against an action plan and timeline, with the aim of expediting the derivatives market launch to enhance market depth.
General Manager of the Market Development Division Saied Mahmud Zubayer shared that the DSE has formulated a strategy and action plan covering the regulatory framework, technological infrastructure, and stakeholder readiness required for the launch. These plans have been submitted to the BSEC, with cooperative progress underway. Initially, DSE intends to introduce index-based Stock Index Futures, followed by Single Stock Deliverable Futures, with an Options Market planned for the long term.
The program also aimed at raising awareness among market participants regarding derivatives products and gathering stakeholders’ opinions on the potential, challenges, and preparations necessary for introducing such instruments.