The Bangladesh Securities and Exchange Commission has said that only research analysts can publicly share their market or stock price forecasts.
The commission issued a statement in this regard on November 7 after witnessing a surge in rumours and false information on various online platforms regarding the capital market.
In the statement, the BSEC warned that only registered research analysts can share market or stock price predictions online.
Anyone else doing so will be breaking securities law, it said, adding that sharing price-sensitive information, false details, or rumours online was also illegal and could lead to punishment.
Rezaul Karim, spokesperson and executive director of the BSEC, said that the commission did not have any list of eligible market analysts, but the BSEC rules clearly defined who is eligible to share predictions and forecasts on the capital market.
According to the Bangladesh Securities and Exchange Commission (Research Analysis) Rules 2013, only a research analyst can share research-driven forecasts or predictions on the market.
A research analyst is a person employed by a stockbroker, dealer, merchant banker of asset management company, investment adviser, or an independent research firm who analyses and evaluates investments in securities and prepares written reports, including investment recommendations through rating systems reflecting the analyst鈥檚 research, the rules said.
There are five types of institutions allowed to publish research reports: broker-dealers, merchant banks, asset management companies, investment advisers and independent research firms.
Each must have a research team of at least three members, including a head of research. Investment advisers and independent research firms also need regulatory registration from the BSEC.
To become a research analyst, professionals need certain educational or professional qualifications. These include credentials like chartered financial analyst, certified public accountant, chartered accountant, certified management accountant, computer science, master鈥檚 in business administration, master鈥檚 in bank management, or a master鈥檚 degree in economics, business studies, or capital market certifications from the Bangladesh Institute of Capital Market, along with three years of experience in the capital market.
A master鈥檚 degree in other fields, along with foreign training and five years of capital market experience, also qualifies someone to be a research analyst. Research analysts must follow a code of conduct, which includes revealing any conflicts of interest.
Research reports that forecast share prices must include details like investment rationale, research methodology, risks, investment recommendations, target price and both absolute and relative valuations based on the company鈥檚 projected financials.
