Stock Exchange Trading Rules for Government Employees | Government Can Allow Its Employees to Trade Stocks

The Ministry of Public Administration is likely to allow government employees to trade on the stock exchange, a departure from a decades-old rule.

According to sources, the ministry sent the draft amendment to the 1979 Rules of Conduct for Government Servants to the Law Ministry, which reviewed it and sent it back.

Once approved by the relevant authorities, government employees will be allowed to buy or sell shares or bonds of any listed company. However, they cannot do so during working hours, according to the draft seen by this correspondent.

“If government employees are allowed to buy and sell on the stock exchange, corruption will increase many times over.”

— Firoz Mia, former civil servant

Under current regulations, public officials are prohibited from engaging in stock trading.

The government has been trying for six years to amend the existing Conduct of Government Officials Regulations 1979 but has not been able to complete the job.

The movement has recently gained momentum. It comes at a time when media reports have been circulating about alleged corruption by some government officials.

Even though public sector employees are not allowed to trade on the stock exchange, many of them do so, ministry sources say.

NBR official Matiur Rahman, who recently came under scrutiny over controversy over his immense wealth, allegedly made his fortune by investing in the stock market.

Sources in the Cabinet Department and the Ministry of Public Administration said Matiur’s case shows how people who have influence over public institutions can become a money-making machine.

His case is simple but intriguing. He went public with insider information, an illegal practice under capital market regulations, to mint money, they said.

“If government employees are allowed to buy and sell in the stock market, corruption will increase manifold. There are both profits and losses in the speculative market. If an employee is facing losses, he may be inclined to corruption. Such an opportunity should not be given at all,” former bureaucrat Firoz Mia told The Daily Star yesterday.

Public officials may not exert pressure on legislators, high-ranking officials and political and non-political figures who have ties to the government in order to obtain direct or indirect benefits.

The bill includes a provision that they cannot even send any electronic messages to obtain favors.

Officials said the bill mentions the possibility of using emails to block lobbying opportunities.

The bill states that public officials may run for office, if the regulations allow it and after obtaining the consent of the relevant bodies, for positions in apolitical organizations.

They were also told that they could not join any protest that broke the rules and could not make statements to the media on behalf of any organisation without permission.

Officials said if the bill is ultimately approved with that provision, government employees would need to seek permission to hold a news conference.

The bill prohibits government officials from directly or indirectly visiting any foreign mission or aid agency for the purpose of receiving an invitation to travel abroad or undergo training abroad.

Under current regulations, government employees are not prohibited from joining recreational clubs.

Citing the Boat Club, a senior official said the incident involving actress Pori Moni had embarrassed the government because the club’s president was a high-ranking official.

The bill includes a provision stating that public officials cannot be members of clubs where people engage in “unethical activities.”

The sources said the current regulations do not specify what public officials can and cannot do on social media.

The bill, however, states that the government can take action against its employees if they violate the ‘Government Servants Discipline and Redressal Rules, 2018’.

Minister of Public Administration Farhad Hossain informed that the project is in the final stage but some changes will be made to it.

“…I can say that a modern and timely code of conduct will be developed,” he said.