BSEC Introduces Gender and Orange Bonds to Boost Bangladesh's Bond Market
BSEC has identified banks, non-bank financial institutions, and corporate entities as potential issuers of innovative bonds, including Gender Bonds and Orange Bonds, which fund projects promoting gender equality and address violence against women and girls respectively. The regulator aims to attract institutional investors and ease pressure on banks by encouraging bond issuance, thereby expanding Bangladesh's stock market today. Funds raised through these bonds must be kept in escrow or designated accounts, with external reviewers ensuring compliance. These instruments are expected to direct financing towards women entrepreneurs and marginalised communities. To encourage adoption, consent fees for sustainable bonds will be reduced to 0.03 per cent. Issuers must disclose how bond proceeds are used, report regularly, and publish annual impact reports. Analysts suggest these amendments aim to diversify financing sources away from the current bank-dependent system, making the stock market more diverse and attractive to cnbc investors. Currently, Bangladesh's bond market is dominated by government securities, with corporate bonds making up less than 1 per cent of GDP. The new rules aim to introduce sustainable instruments like gender bonds, orange bonds, and sustainability-linked bonds, fostering economic growth that benefits all sectors of society.
