2.1 Structure of Financial Activities
2.2 Regulatory Structure
      2.2.1 Overview
      2.2.2 Responsibilities of regulatory body
      2.2.3 Supervision of stock exchange
      2.2.4 Supervision of clearing and central securities depository organisations
      2.2.5 Supervision of broker/dealers and custodian banks

2.2.1 Overview

 

2.2.2 Responsibilities of regulatory body

    The Securities and Exchange Commission is a statutory organisation constituted by the Government through the Securities and Exchange Commission Act, 1993.

According to Section 8 of the Securities and Exchange Commission Act, 1993 the responsibilities of SEC are:

• Regulating business in stock exchange and any other securities markets.
• Registering and regulating the work of stock brokers, sub-brokers, share transfer agents, bankers to an issue, trustee of trust deeds, registers to an issue, merchant bankers, underwriters, portfolio managers, investment advisors and any other intermediaries who may be associated with securities markets in any manner.
• Registering, controlling and regulating the work of collective investment schemes including mutual funds.
• Promoting, regulating and controlling self-regulatory organisations.
• Prohibiting fraudulent and unfair trade practices relating to securities markets.
• Promoting investors’ education and training of intermediaries of securities market.
• Prohibiting insider trading in securities.
• Regulating substantial shares acquisition and company take-overs.
• Undertaking inspection, conducting inquiries and auditing the stock exchanges, intermediaries and self-regulatory organisations in the securities market
• Levying fees or other charge for carrying out the activities described above.
• Conducting research for the above activities and declaring data and information.
• Performing other functions as prescribed.

     - Capital Issues (Continuance of Control) Act 1947
     - Securities and Exchange Ordinance 1969
     - Securities and Exchange Commission Act 1993
     - Securities and Exchange Commission (Stock Broker, Stock Dealer and Authorised Representative) Regulation 1994.
     - Securities and Exchange Commission (Merchant Banker and Portfolio Manager) Regulation 1996
     - Securities and Exchange Commission (Mutual Fund) Regulation 1997
     - Credit Rating Rules 1996
     - Securities and Exchange Commission (Control of Insider Trading) Regulation 1995
     - Securities and Exchange Rules 1987
     - Public Issue Rules 1998
     - Right Issue Rules 1998

2.2.3 Supervision of stock exchange

    The stock exchanges are Self-Regulatory Organisations under the supervision of the Securities and Exchange Commission.

2.2.4 Supervision of clearing and central securities depository organisations

    Both stock exchanges operate their own separate clearing houses for settlement of securities. All securities of the listed companies are handled by the stock exchange clearing houses.

   Currently there is no central securities depository in Bangladesh. It is in the process of formation and is expected to be operative by the year 2000.

2.2.5 Supervision of broker/dealers and custodian banks

    The Rules of the Securities & Exchange Commission, and Regulations and by-laws of the Stock Exchange govern the brokers/dealers of the stock exchanges.

   Banks providing custodial services are under the supervision of the Bangladesh Bank and are subject to the Bank Companies Act, 1991

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