It\'s about time for DSE to regain trust of investors

A. F. M. Mainul Ahsan | Wednesday, 28 September 2016

Even public offices today all over the world are getting creative to increase their revenue. Apparently this practice is now being adopted by Dhaka Stock Exchange (DSE). As the part of continual development process, DSE has launched its upgraded version of website. Since "the official website of DSE is one of the most visited sites of Bangladesh," DSE has taken initiative to put advertisement on its website through "local and international advertising institutions" under the "advertisement Policy on the DSE Websites".
A banner ad is a form of advertising on the website delivered by an ad server. This form of online advertising entails embedding an advertisement into a website. It is intended to attract traffic to a website by linking to the website of the advertiser. In this type of ads, DSE does not have any control over the content of the ads. The ad content will change automatically based on different factors including visitors' geographic location and browsing history.  
The mission of DSE's website is apparently "to enhance confidence of investors, regulators, issuers and intermediaries". However, because of both technical and moral grounds, the decision to put banner ads on the website may prove to be counterproductive to this mission.
When it comes to investing in shares, information is the key. Investors will use information from reliable sources to take their investment decisions. DSE's website is supposed to be a truly reliable source of information for investors at home and abroad. Thousands of investors visit DSE website every day since trustworthy information source for investment purpose in Bangladesh is awfully limited. However, providing banner ads on the DSE website can compromise the reliability of the website content and, thus, can result in massive market-wide anxiety.
In a statement to its users, Norton, the world's largest security software provider, warned that banner ads on websites are a new source of internet threat. Nowadays hackers are turning their attention to banner ads as a vehicle for targeting one's computer and sensitive information. Few months ago, a number of major news websites, including the New York Times, the BBC, AOL and the NFL, have seen adverts hijacked by a malicious campaign that attempted to install "ransomware" on users' computers. The malware was delivered through multiple ad networks. When users clicked on the infected adverts, they redirected the page to servers hosting the malware which then encrypted the user's hard drive and demanded payments in bitcoin for the keys to unlock it. There are hundreds of examples where hackers used banner ads from different ad networks, including Google, to damage a website.
What will happen when a hacker, using banner ads, breach the security of the DSE website and manipulate some price-sensitive information? Have we not learnt anything from Bangladesh Bank's $81-million reserve heist?
Investors expect DSE websites to be unbiased. Banner ads on DSE website also generate privacy concerns. For instance, ad networks, including Google, automatically collect information about users when they click on an online advertisement, which is later used to further market their products.
It can be safely assumed that banner ads on DSE website will be related to investment product and service. For example, a banner ad on DSE website dated September 15, 2016 says: "Aussie Dollar Crash 2016: Aussie Dollar to Fall Below $0.50. Protect your wealth". If investors believed this story in the ad and rebalanced their portfolio accordingly, they may lose money. Who will then be responsible? What will happen if an investor sues DSE if he loses money because of faulty information given in the banner ads on its website?
Astoundingly, no disclaimer is given anywhere on the DSE website about the reliability of the information given in the banner ads. Even with the use of disclaimers, allowing an advertisement to run on DSE website implicitly suggests that the DSE approves of the products or services. Clicking on these banner ads can also redirect users to other websites, which may contain questionable contents that may reflect poorly on the DSE.
DSE also has the provision to display ads from local firms which may cause conflicts of interest. For example, an ad from a brokerage house owned by a director of DSE will lead to potential conflict of interest. This may also lead to allegations of preferential treatment.
This author randomly browsed through 46 websites that belongs to different bourses across the globe. None of the websites had any kind of commercial ad. Also, no commercial ads were found in a randomly selected 55 Bangladesh government websites.
DSE is putting ads on its website obviously to increase profitability. How much money does DSE need? According to DSE's annual report for 2014-15, net income of DSE was Tk 1.35 billion (135 crore) during 2014-15 and Tk 1.34 billion (134 crore) during 2013-14. This profit is way more than the 90 per cent of the listed commercial banks made during the same period in Bangladesh. As a government entity, should DSE give priority on maximising profit rather than public interest? DSE, with total asset of Tk 22.94 billion  (2294 crore), must not focus on maximising its own profit at the expense of investors' safety. Because of obvious safety and ethical grounds, organisations like DSE and SEC (Securities and Exchange Commission) shouldn't have any ads on their websites. Rather DSE or SEC websites should provide a reliable platform from where investors can confidently retrieve information.
DSE website, which is funded by tax money,  should be a safe and unbiased oasis for price-sensitive information. Looks like DSE is struggling to understand its mission to "enhance confidence of investors, regulators, issuers and intermediaries". It's about time for DSE to regain trust of investors.
The author is a Lecturer in Economics at Independent University, Bangladesh (IUB). He is currently on study leave in Australia.
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