Acting as an issue manager for public offers, underwriting securities and managing portfolios for clients are regulated activities that require BSEC registration in the relevant category. Many institutions hold a combined registration covering issue management, underwriting and portfolio management, while others register for specific activities only. Related activities, such as brokerage, dealing, asset management, trusteeship or custody, need their own separate registrations. Before launching a business, we map the planned services against the registration categories so that the entity does not inadvertently carry on regulated business without proper authority from the Commission. Unregistered activity carries serious risk.

Generally, no. Bangladesh Bank requires banks to carry on merchant banking and brokerage activities through separate subsidiaries rather than within the bank, and many leading merchant banks are bank subsidiaries. The bank's investment in the subsidiary and the subsidiary's capital market activities interact with banking law limits on capital market exposure. Bank-owned intermediaries must therefore comply with both BSEC rules and Bangladesh Bank requirements. We advise banks on establishing, capitalising and governing these subsidiaries and on transactions involving them, including acquisitions, mergers and capital increases. Capital and ownership plans should be checked against both sets of requirements first.

BSEC rules set minimum paid-up capital and net worth requirements, which differ by registration category and have been revised over time, as well as requirements for qualified and experienced key personnel, including the chief executive and compliance officers. Sponsors and directors must meet fit and proper standards, including financial soundness, integrity and absence of disqualifying defaults or convictions. Because these thresholds change, we confirm the current figures when preparing an application. A credible business plan and real operational capacity matter as much as meeting the minimum numbers on paper. Allow time to recruit qualified staff before applying.

Foreign investors can own or invest in merchant banks in Bangladesh, subject to BSEC approval of sponsors and directors and to foreign investment and exchange control requirements. The investment must be brought in through proper banking channels, and repatriation of dividends and sale proceeds depends on correct documentation. Some foreign groups enter through joint ventures with local financial institutions, while others acquire existing registered entities. We advise on structure, approvals and governance, including how a foreign parent's group compliance policies can be applied within the Bangladesh regulatory framework. Joint venture or acquisition affects control, timing and approvals.

There is no fixed statutory timetable that guarantees a decision date. The time taken depends on the completeness of the application, the profile of sponsors, the Commission's workload and policy priorities, and how quickly queries are answered. Incorporating a new company, raising capital, hiring qualified staff and setting up offices and systems also take time before an application can be filed. We prepare a realistic plan with clear dependencies and keep applications complete, which is the most reliable way to avoid avoidable delays in the merchant banker registration process. Log each Commission query and its answer date.

Changes in sponsors' shareholding above specified levels, appointment of new directors or chief executives and changes to business scope usually require prior BSEC approval, and bank-owned entities may also need Bangladesh Bank clearance. Completing a share transfer or appointment without approval can expose the intermediary to penalties and may undermine the registration itself. We advise on the sequence of corporate approvals, regulatory applications and completion steps, and we include regulatory approval conditions in acquisition and investment agreements so that buyers are protected. We manage the full sequence for clients.

Key risks include margin lending outside permitted limits, negative equity in client accounts, inadequate segregation of client money and securities, conflicts between proprietary and client trading, weak know your customer and anti-money laundering procedures, poor record keeping and unclear client agreements. Misselling and unsuitable discretionary trading can also lead to complaints and regulatory action. We review policies, procedures and sample files to identify gaps, recommend practical improvements and help the portfolio manager present a credible compliance position to BSEC and its own board. Periodic file reviews help gaps surface before an inspection does. Boards should receive regular reports.

The response depends on the order and the stage reached. Show cause notices should be answered fully and promptly, with supporting documents, and a hearing may allow the intermediary to explain its position or propose remedial action. Orders can sometimes be reviewed by the Commission, and in appropriate cases a writ petition may be filed in the High Court Division challenging the lawfulness of the decision. Early legal involvement often narrows the issues considerably. We advise merchant banks on responses, settlement discussions and litigation, keeping the long-term regulatory relationship in view. Keep complete records of the matters under review.