Surveillance and Enforcement Problem of Stock Market in Bangladesh

Being the regulator of capital market, Bangladesh Securities and Exchange Commission (SEC) is responsible to monitor the market to find out the irregularities in the market, if there is so and then to take necessary measures. The study has attempted to explore the reasons behind the stock market bubble and burst in Dhaka Stock Exchange Limited (DSE). A number of factors play influential roles behind the bubble and burst in Dhaka Stock Exchange Limited. This burst is caused by many factors those are tried to be identified and linked up between causal factors of market crash and regulatory failure. The critical investigation and analysis of the relevant factors including the relevant legal and regulatory framework is the prime concern of this study. Lack of coordination among the regulators, excess liquidity in the capital market, few numbers of new listings, stock splits and stock price manipulations, investor's greed and irrational behavior plays a big role to make the stock prices sky rocking as investors are crazy to buy shares without judging the company fundamentals. At the end of the study some recommendations have been made to check future stock market bubbles.