The Bangladesh Securities and Exchange Commission has published rules allowing large companies to list on the country's stock exchanges without an initial public offering, reopening a route that had been closed to private firms for 16 years.

The Direct Listing of Securities on the Stock Exchange Rules, 2026 appeared in an additional issue of the Bangladesh Gazette on 18 October and took effect on publication, the regulator said in a press release.

Under the rules, eligible companies list by selling shares already held by sponsors and early investors instead of issuing new shares to raise capital. Sellers must offer at least 10 per cent of the company's paid-up capital.

The route is open to companies wholly or majority owned by the government and to firms in which the state holds at least 10 per cent. Companies at least 51 per cent owned by foreign shareholders also qualify.

Scheduled banks, financial institutions and insurers with at least Tk 500 crore in net assets can apply, as can companies with annual turnover of at least Tk 1,000 crore. Stock exchanges and depositories are eligible too.

Applicants must have at least five years of commercial production behind them, profit from core operations in each of the last two financial years and positive cash flow from operations. Companies with accumulated losses are excluded.

Sponsors and directors selling shares cannot be loan defaulters, and they must keep at least 30 per cent of the company after listing.

A merchant bank will set a reference price from the company's assets, liabilities and earnings. The minimum offer price must be at least 25 per cent below that reference, and investors cannot bid below the floor during the first two days.

Direct listing was introduced in 2006. Controversy over the 2010 listings of Khulna Power Company and Ocean Containers led the regulator to limit the route to state-owned firms, and no state company has used it since. Five private companies have listed directly: Shinepukur Ceramics in 2008, Navana CNG in 2009, Khulna Power and Ocean Containers in 2010, and ACI Formulations.

The commission is betting that the route will draw large, established companies to a market that has not seen a new IPO in more than two years, and give founders a way to sell part of their stake without taking the company public through a full offer.

How much difference the rules make will depend on implementation, including how strictly the commission screens applicants, verifies their accounts, sets reference prices and enforces the ownership conditions.