Markets
Bangladesh: a consent regime, not a pricing market
A listed Bangladeshi company cannot contract a conversion price that refixes against future market prices, and cannot run a standby equity facility, because the decision is not the parties’ to make. Every issue of capital runs on a prior application to the Commission for consent, a convertible is distributed by rule rather than placed with one taker, and converted equity is locked in.
Key takeaways
- Consent comes before price. An issue of capital runs on a prior application to the Commission under the Issue of Capital Rules 2001, and a price the parties will only discover at some future conversion is not something that application can describe.
- The rulebook you will be quoted was repealed. The Public Issue Rules 2015, the source of the distribution split still cited for Bangladeshi convertibles, was repealed by the Public Offer of Equity Securities Rules 2025, gazetted on 30 December 2025.
- A convertible is distributed, not placed. The rules reserve defined portions of the issue for existing shareholders and for a public offer, so one capital provider does not take the instrument. The proportions are not stated here — see “What governs the instrument now”.
- Converted equity is locked in. Equity issued against a convertible carries a lock-in running from the security or from the consent. Its length is not stated here.
- An unconverted convertible bars a public offer. Under the 2025 Rules an issuer may not apply until it has fully converted its convertible securities into ordinary shares.
The rule everyone still quotes was repealed
Ask how a Bangladeshi listed company issues a convertible and the answer you will be given is a fixed distribution split: the Public Issue Rules 2015 deemed such an issue a repeat public offer and reserved defined tranches for existing shareholders and for a public offer.
That rulebook is gone. The Public Offer of Equity Securities Rules 2025, notified on 28 December 2025 and gazetted two days later, repealed it with immediate effect. The replacement reaches only equity securities offered to the public, its definition of a repeat public offer carries no deeming sentence, and its prospectus schedule describes debt securities expressly without conversion features.
What replaced it is not a permission but a disqualification. An issuer may not apply for a public offer unless it has fully converted its convertible securities within the financial year on which it goes to market. Sign a five-year convertible and the public market closes behind you.
What governs the instrument now
The live authority is the Debt Securities Rules 2021, which deal with securities having conversion or exchange option features. Those Rules reach a private offer as well as a public one, so a privately placed convertible is recognised rather than prohibited. It is then throttled, and the throttles are what close the market.
There are four, each stated here as a category rather than a figure: a minimum period after issuance before the option may be exercised; a ceiling on converted equity, both within a financial year and against pre-issue paid-up capital; a floor under the combined sponsor, promoter and director holding that must survive the conversion; and a distribution requirement reserving tranches for existing shareholders and for a public offer.
So the capital provider never holds the whole instrument, and cannot convert on demand. That is the shape of the facility Bangladesh lacks: what an equity facility actually is and convertible debt financing.
| Structure | Position | Available instead |
|---|---|---|
| Conversion priced at each conversion | A minimum period after issuance before the option may be exercised | A rights issue, or a discrete offer priced when consent is sought |
| Whole convertible taken by one investor | The private offer is a capped tranche of the issue | A minority beside the shareholder rights option and the public issue |
| Standby facility or at-the-market programme | No analogue in any of the three rulebooks | Discrete issues, each with its own BSEC consent |
| Freely tradable shares on conversion | Lock-in under the Issue of Capital Rules | The convertible's own holding period counts |
| As at August 2026, on the rules cited below. Not an offer, a quote, or a rate card. | ||
The lock-in, and the one place a refixing price is addressed
The lock-in provision of the Issue of Capital Rules 2001 survived both repeals. It locks in equity issued against a convertible security by a listed company, for a longer period where the holder is a director or a substantial shareholder and a shorter one for everyone else, and a proviso counts the time between the convertible and the converted equity toward it — functionally the tacking familiar from the Rule 144 holding period. The periods themselves are not printed here.
A second proviso repays reading twice, because it is the only place in the Bangladeshi rulebook that looks straight at a market-referenced conversion. The same lock-in is reported to catch equity issued against a loan or debt security having no predetermined conversion feature unless it is issued at a trailing weighted-average market price. That is a regulator declining to ban the structure and setting the reference itself instead. The length of that averaging window is one of the items this page will not state until the gazetted text is read.
What is available instead
A rights issue, or a discrete offer priced when consent is sought, on an application under Rule 3 of the Issue of Capital Rules 2001. The foreign-exchange chain then runs downstream of BSEC rather than beside it: Bangladesh Bank's general permission for issuing shares to non-residents is conditioned first on the issuer holding permission for its capital issue, and the currency must be encashed into taka before the shares are issued.
General information, not legal advice. Written in August 2026 from the Debt Securities Rules 2021, the Issue of Capital Rules 2001 as updated to 2021, the Public Offer of Equity Securities Rules 2025 and Bangladesh Bank's guidelines. These rulebooks were rewritten twice in five years, and how they interact on one convertible is a question for Bangladeshi counsel.
What this page does not state, and why. The gazetted Bangladeshi rules are published as scanned Bengali documents that could not be read as text. Rule and sub-rule numbers, the length of the bar on early exercise, the percentage caps, the sponsor-holding floor and the lock-in periods are therefore given as categories, not figures. The repeal of the Public Issue Rules 2015 by the Public Offer of Equity Securities Rules 2025, gazetted on 30 December 2025, is the one dated fact here confirmed independently.
What would change the answer
Two things, neither of them negotiation. The Commission may relax the Debt Securities Rules caps on application and on merit. Failing that, a group listed outside Bangladesh can put a market-referenced structure against that listing. Check which listings we work with.
The regional comparison is instructive rather than reassuring. Colombo bars a second private placement for 24 months, India prices preferential issues by a mandatory formula, and Vietnam immobilises the stock after issue rather than throttling the conversion.
Primary sources
- BSEC — Debt Securities Rules, 2021 (securities with conversion and exchange option features)
- BSEC — Issue of Capital Rules, 2001, updated to 2021 (consent to an issue of capital; lock-in)
- BSEC — Public Offer of Equity Securities Rules, 2025 (Rule 23 repeals the 2015 Rules)
- Bangladesh Bank — Guidelines for Foreign Exchange Transactions, Chapter 9
Bangladeshi listed issuers: frequently asked questions
Can a listed Bangladeshi company issue a convertible with a conversion price referenced to the market?
Not in a form that would work. The Debt Securities Rules 2021 recognise a debt security with a conversion option, including one placed privately, but bar exercise of that option for a period after issuance and cap the tranche a private taker may hold. A price discovered at each future conversion has no conversion left to be measured at.
Is a convertible not treated as a repeat public offer in Bangladesh?
It was, and that is still the answer most sources give. The Public Issue Rules 2015 deemed the issuance of securities having conversion features to be a repeat public offer and split the issue between shareholders, the public and a private tranche. Those Rules were repealed by the Public Offer of Equity Securities Rules 2025, gazetted on 30 December 2025.
How much of a Bangladeshi convertible can one investor take?
A capped minority of it. The Debt Securities Rules 2021 make a listed issuer offer part of the issue to existing shareholders as a rights option and reserve a further part for a public issue, leaving the private taker a limited tranche. Anything unsubscribed falls into the public offer, not back to the private taker. This page does not print the percentages, because the gazetted text could not be read.
Are shares locked in after conversion?
Yes. The Issue of Capital Rules 2001 lock in equity issued against a convertible security by a listed company, for a longer period where the holder is a director or a substantial shareholder and a shorter one for everyone else, running from issuance of the security or of the consent, whichever is later. The periods are not printed here.
What is available instead
What a Dhaka or Chittagong issuer can do is a discrete, consented, priced issue: the Commission's consent comes first, and the price goes into that application rather than being discovered later. Pakistan is the nearest market in the region that prescribes no minimum price at all.