The Bangladesh Securities and Exchange Commission (BSEC) has issued new regulations to tighten the criteria for companies listed as ‘junk’ on the stock market.

These changes aim to improve transparency and investor protection. Under the new rules, companies failing to declare dividends for two consecutive years or hold annual general meetings within stipulated timeframes will be automatically categorized as ‘Z’ (junk).

Companies not operating for at least six months, reporting net losses or negative cash flow for two years, or having negative retained earnings exceeding paid-up capital will also be placed in the Z category.

Moreover, non-compliance with securities laws, regulations, or stock exchange listing requirements will result in Z-category placement. However, companies providing interim dividends based on audited financials can be upgraded.

Sponsors and directors of Z-listed companies, excluding banks, insurance, and non-bank financial institutions, will require BSEC permission to transact shares.