The capital market plays an important role in economic development of Bangladesh. Capital market in Bangladesh consists of two full-fledged automated stock exchanges- the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE). Bangladesh Securities and Exchange Commission (BSEC), as the supervisory body regulates the stock exchanges of the country. Though capital market plays significant role in economic development by channeling long term funds from savers to investors, capital market in Bangladesh is still lagging behind as compared to those of South Asian and South-east Asian countries. Banks play dominant roles in financing economic activities in Bangladesh. However, banks are not in a position to finance a long term productive investment activities continuously following higher level of non-performing loan and risk of maturity mismatch of funds. Given this, Bangladesh needs to undertake measures to expand capital market for financing productive investments and infrastructural projects. To this end, regulator of capital market BSEC may undertake some pragmatic steps to ensure good corporate governance motivate good companies for floating bonds, shares and continue legal facilitation with more attractive incentives, especially for the foreign participants.