Is forecasting the price of a listed security allowed in Bangladesh?

September 23, 2026

  1. 1. One one hand, the BSEC Research Analysis Rules 2013 bearing reference no. SEC/CMRRCD/2012/225/149/Admin/50 dated 22.08.2013 (“2013 Rules”) allows certain persons/entities related to the securities market to publish formal research reports, subject to compliance requirements under the 2013 Rules, which appear to contemplate publication of investment recommendations, target prices, valuation methodology, risks, and absolute/relative valuation based on forecasted financials.

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  2. 2. On the other hand, the BSEC order bearing reference no. BSEC/MSI/2020-981/114 dated 02.09.2020 (“2020 Order”) restricts persons/entities related to the securities market from spreading any prediction, price forecasting or undisclosed information in any form, including social media.

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  3. 3. On the face of it, there appears to be a conflict between the 2013 Rules and the 2020 Order.

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  4. 4. The 2013 Rules were issued by the BSEC in exercise of its power under Section 33 of the Securities and Exchange Ordinance 1969 (“Ordinance”). On the other hand, the 2020 Order was issued by the BSEC in exercise of its power under Section 20A of the Ordinance.

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  5. 5. It is a well-established principle of law that where orders and rules have a statutory origin, none is subordinate to the other. Therefore, since both the 2013 Rules and the 2020 Order originate from the same Ordinance and were issued by the same statutory authority, neither instrument is superior or subordinate to the other.

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  6. 6. Another point of view, however, is that there is no conflict between the 2013 Rules and the 2020 Order. Therefore, the question of which instrument prevails over the other does not arise. The proper approach is to read both instruments harmoniously and give effect to each within its respective field of operation.

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    The 2013 Rules

  7. 7. Rule 3 of the 2013 Rules identifies the persons and entities eligible to publish research reports. These include Merchant Bankers, Stock-dealers, Stock-brokers, Asset Management Companies, Investment Advisers and Independent Research Firms. These entities are either already regulated by the BSEC or are required to obtain registration from the BSEC before publishing research reports.

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  8. 8. The object of the 2013 Rules is, therefore, to create a regulatory framework for the publication of research reports. The 2013 Rules impose compliance requirements, including requirements relating to the qualifications of research analysts, disclosure of conflicts of interest, research standards, contents of research reports which includes, among others, target pricing. In particular, the 2013 Rules impose the requirement of disclosure of the valuation method used to determine the price target and a disclosure concerning risks that may impede achievement of the price target to clients and prospective clients.

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    The 2020 Order

  9. 9. The 2020 Order, on the other hand, was issued in a different context and for a different purpose. It is aimed at preventing unregulated persons, entities, online groups and anonymous market operators or participants from misleading investors by using the names or logos of the BSEC, DSE or CSE, or by spreading any unregulated, misleading or fraudulent prediction, price forecasting or undisclosed information etc. related to the securities market in any form, including all kinds of social media platforms. Several features of the 2020 Order support this point of view.

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  10. 10. First, the 2020 Order expressly refers to the unauthorised use of the names and logos of the BSEC, DSE and CSE, including on social media platforms. This language is directed at unregulated, misleading or fraudulent online activities such as any direct or indirect indication of being associated with the securities market regulators (BSEC, DSE or CSE). Licensed research analysts and regulated research entities operating under the 2013 Rules do not act anonymously and do not rely on unauthorised branding or deceptive association with the BSEC, DSE or CSE.

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  11. 11. Second, the 2020 Order contemplates, among others, criminal prosecution under the Digital Security Act, 2018 (now repealed and replaced by the Cyber Security Act 2026). This reference establishes that the BSEC’s aim is to target cyber-crimes and fraudulent misrepresentations, rather than altering the institutional compliance matrix of “research analysts” duly licensed by the BSEC.

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  12. 12. Third, the purpose of the 2020 Order is further supported by the BSEC’s press release dated 09.09.2025, where the BSEC noted that fraudulent groups were attempting to deceive investors by making attractive investment offers in the capital market through social media platforms. The press release also referred to Facebook pages, IDs and groups through which fraudulent and misleading information was being circulated regarding the rise and fall of prices of securities in the securities market. This demonstrates that the BSEC was addressing a specific market abuse i.e. the use of social media platforms to spread predictions, price forecasting and/or undisclosed information to ultimately defraud and mislead investors. The press release also referred to the 2013 Rules and reiterated that only Merchant Bankers, Stock-dealers/Stock-brokers, Asset Management Companies, Investment Advisers and Independent Research Firms could obtain registration as a Research Analyst under the 2013 Rules and publish research reports, which may contain opinion/advice on the price of listed securities.

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    Conclusion

  13. 13. In conclusion, the 2020 Order and the 2013 Rules should be viewed harmoniously, with each serving its own purpose. The 2020 Order should be read as restricting (i) fraudulent misrepresentations by persons, groups or entities indicating any kind of association with the securities market regulators (BSEC, DSE and CSE) by using their names and/or logos, and (ii) spreading of predictions, price forecasts, or undisclosed price sensitive information about listed companies by unregulated persons, entities, online groups, particularly through social media platforms. The 2020 Order should not be read as prohibiting regulated research entities from publishing target prices in research reports prepared in compliance with the 2013 Rules.

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  14. 14. On the other hand, under the 2013 Rules, persons and entities duly licensed by the BSEC are allowed to publish research reports, which may include target pricing, in compliance with the 2013 Rules. Accordingly, a target price contained within a compliant research report (under the 2013 Rules) should not be treated as price forecasting under the 2020 Order because a target price under the 2013 Rules is a regulated valuation output supported by disclosures of conflict of interest, valuation methodology, risks etc.

Written by Tanvir Quader (Partner) and Tashfia Aziz (Associate) at Vertex Chambers

† Disclaimer: The opinions and comments expressed in this Blawg are not to be regarded or construed as legal advice by and from Vertex Chambers or any of its members. It is highly advisable that any person should seek independent legal advice before relying on any of the contents of this Blawg.

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