The Dhaka Stock Exchange (DSE) should be given more power so it can combat irregularities in the stock market, ATM Tariquzzaman, managing director of the bourse, said yesterday.

"At present, the surveillance team of the DSE is working to fight against manipulation, but it needs more power to dig deep and combat manipulation," he said.

Specifically, it should have the power to investigate a company's factory, he said.

The DSE cannot go to investigate a factory without prior approval from the Bangladesh Securities and Exchange Commission (BSEC). While they are seeking such approval, the situation often deteriorates.

He added that when bourse officials ask for documents, companies avoid co-operating because they are not bound by the law to provide information.

"We have no legal power to force them to provide information, but the BSEC can compel them," Tariquzzaman added.

As such, the primary regulator of the stock market needs more power if it is to reduce manipulation in the market, he said while speaking at an event organised by the Capital Market Journalists' Forum (CMJF) at its office in the capital.

Ziaur Rahman and Abu Ali, president and secretary general of the journalists' organisation respectively, were present in the meeting.

Tariquzzaman joined the DSE as its chief in September this year. Before joining the bourse, he worked in the BSEC as an executive director.

He also believed the stock exchanges should have more power in the initial public offering (IPO) process. In some countries, stock exchanges give the go-ahead for IPOs, but in Bangladesh BSEC gives approval.

Tariquzzaman added that a floor price is not a permanent solution to boosting investor confidence, saying: "This is an intervention in the price mechanism. A regulator should not intervene here."

About the benefits of the demutualisation, he said the management of the bourse is now separate from the board and that the board has no influence on the management. Brokers also have no legal way to intervene in the works of the management, he added.

He went on to say that the DSE has been doing its external audit through a single auditor, A Qasem & Co Chartered Accountants, for the last 36 consecutive years, which is surprising.

While listed companies are compelled to rotate external auditors, there is no such legal provision for the DSE.

Nevertheless, rotation is necessary because it is tough for an auditor to work independently if they work for the same company year after year.

By appointing a single auditor for so many years, the bourse broke auditing principles. The positive side is that the DSE has already taken that into account and is planning to change the auditor, he added.