Issue of Securities: Equity, Debt, Funds and Sukuk
The primary-market toolkit
A public issue of securities in Bangladesh is governed principally by the Public Issue Rules, which set out eligibility, disclosure, and the process: appointment of issue managers, due diligence, prospectus or offer document contents, BSEC review and consent, subscription, allotment and listing. Key concepts a candidate must master: eligibility criteria (track record, net worth, capital structure, no default), disclosure standards (risk factors, use of proceeds, related-party transactions, audited financials), book-building versus fixed-price methods, IPO allotment rules including quotas for retail, institutions and affected groups, and post-issue obligations (listing, reporting, lock-in of sponsor shares).
Debt issuance adds concepts of coupon, tenure, security/trust deed, credit rating and trustee appointment. Funds - mutual funds and alternative collective investment schemes - involve a sponsor, asset manager, trustee and custodian, with a trust deed and an offer document; the trustee's independence is a favourite exam theme. Sukuk are Shariah-compliant certificates representing ownership in an underlying asset or venture, structured through vehicles such as ijara, mudaraba or musharaka, requiring a Shariah advisory/approval process alongside the ordinary disclosure regime.
Traps
Watch for questions that confuse approval with guarantee - BSEC consent does not endorse the investment's merit. Another trap is the use of proceeds: diversion from disclosed purposes is a violation. Distinguish the roles (issue manager vs. underwriter vs. trustee vs. custodian). For sukuk, remember that Shariah compliance is a separate gate from regulatory approval; both are needed. For IPOs, allotment-quota mechanics and lock-in periods are frequently misstated.
Rule of thumb
For any issue, trace four gates: eligibility → disclosure → regulatory consent → post-issue compliance. Missing any gate invalidates the process.
Worked example: A company raises funds for a new plant but spends part of the proceeds on repaying director loans. That is a use-of-proceeds violation even though the prospectus was properly approved.