None other than research analysts can publicly share their market or stock price forecasts, the Bangladesh Securities and Exchange Commission (BSEC) said on Thursday.

The regulator, noting a recent increase in the spread of capital market misinformation and rumors in cyberspace, issued a statement to remind the public of the regulatory ban.

Spreading undisclosed price-sensitive information, false information or rumors online is a punishable offence, BSEC warned.

Anyone sharing market predictions or stock prices online without being a research analyst will be considered a violation of securities law.

OCEMN called on everyone to refrain from spreading baseless information online, warning that violations will result in strong legal action.

However, research analysts who comply with the Bangladesh Securities and Exchange Commission (Research Analysis) Rules, 2013 are free to publicly share their research-based predictions about the market and share prices, BSEC clarified.

According to the rules, a research analyst is a person either employed by a market intermediary or investment adviser or who works for an independent research firm that analyzes and evaluates investments in securities and prepares written reports, including investment recommendations through systems rating that reflects analyst research.

Broker-dealers, commercial banks, asset management companies, investment advisers or independent research firms are the five types of institutions that can publish research reports. They must have at least a research team of 3 members, including a research chief.

Investment advisers and independent research firms must have regulatory registration from the BSEC.

Research analysts must have educational or professional qualifications such as CFA, CPA, CA, CMA, CS, MBA, MBM or a master’s degree in economics or business studies or capital market-related certificates from the Bangladesh Institute of Capital Markets Capital, together with three years of capital market experience.

Having a master’s degree in other disciplines, overseas training and five years of capital market experience will also make her eligible to be a research analyst.

The analyst code of conduct includes appropriate disclosure of conflicts of interest. Any investment banking relationship with the company in question in the past 12 months or potential in the next 12 months, any other fee-generating engagement with the company and any investment in the company – all must be disclosed.

The investment rationale, research methodology, investment risk, investment recommendation, target price and absolute and relative valuation based on the company’s financial forecasts must be included in the stock price forecast research report according to the rules.

The community of investment professionals in Bangladesh is growing rapidly.

Analysts welcomed the clarification that allowed them to share predictions, as they used to refrain from forecasting publicly because of confusing earlier regulatory filings.

This created a vacuum in the informed sharing of opinions in the public domain, leading to the proliferation of uninformed predictions, which destabilized the market environment.

OCEMN has not yet issued any investment advisory license to qualified persons as seen in other markets including India.