Govern Rules & Regulation to p0rotect Investor

8/3/2019 Govern Rules & Regulation to p0rotect Investor

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There are mainly two players in our country who regulate, make rules, acts,

in the security markets. These are the Government and Security and Exchange

Commission of Bangladesh (SEC). Beside this the two markets Dhaka Stock

Exchange (DSE) and Chittagong Stock Exchange (CSE) are also enable to make

rules, regulations regarding their market affairs.

Government Regulation:

The government has enacted varieties of laws applicable to the securities

markets. These laws were the result of certain abuses that took place during the last

decade. The collapse of the stock market of Bangladesh in 1996 provides an

impetus for the regulation of securities trading. Securities markets regulating

authority of Bangladesh along with the investors recognize that the regulation ofsecurities markets is necessary in order to restore the confidence of the investors in

the markets and ensure a continuous flow of capital in business.

The basic laws under which the transfer of stocks and bonds are being

regulated are the securities and exchange ordinance, 1969, and Securities and

Exchange Commission act, 1993. The principles objectives of these laws are to

protect the suppliers of capital from fraud and to ensure that information received

by investors is truthful, accurate, complete, and reliable.

Laws launched and imposed by the regulating authorities SEC attempt to

achieve these goals by way of disclosing all material information affecting the

price of a security, controlling the insider activities, and controlling the issuance of

new stocks favorable nor unfavorable information from the public. The actual

implementations of full disclosure sometimes present problems, which must be

turned over to corporate counsel. Corporate directors, officers and shareholders

(who are called insiders) are not permitted to profit from inside information.

Transactions made by such insiders must be reported to the security and

exchange commission. The SEC publishes reports of insider trading showing thenames of insiders involved in trades. Corporate insiders are permitted to trade in

the stock of their corporation if the comply with the reporting requirements

although they are not permitted to make short term abnormal profit by selling

short.


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Laws have been established to ensure that information provided to investors

in prospectuses for new stocks is accurate and complete. For the sake of the

investors protection in the securities markets, government has enacted variousregulations as needed time to time.

Government Legislation:

Many fraudulent and undesirable practices occur in the securities markets-

both in primary and secondary markets. To improve the stability and validity of the

securities markets, more acts, rules and regulations have been legislated by the

government after establishments of Securities and Exchange Commission in 1993.

A tremendous development in the securities markets is possible if the

legislations come into effect. Major legislations regulated in the securities markets

that are liable to give protection to the investors in the securities markets. The

following are the regulations regarding the legislation to protect the interest of

investors.


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Securities and Exchange Commission:

In mixed economies like Bangladesh, the major part of domestic savings

takes place in the private sector. The domestic saving rate is positively related to

the level of income and its growth rate. To raise the saving rate one mustunderstand the savings preferences and motives of the non-corporate sector of the

country. Economic history of some developing countries suggests that in the

evaluation of the financial structure, the non corporate sector prefers to hold more

than 50 percent of its financial savings in the form of savings and fixed deposits.

Security markets in Bangladesh well established in 1954 while the formal

trading began in 1956. Their activities are being controlled and regulated by the

article of association along with other government regulations subject to

amendment from time to time. The capital issue Act, 1954, however, is one of thepieces o legislation governing the stock exchange in the country.

Consequently upon, with the spirit of the nationalization and socialization

motive of the government, the then only securities market in Bangladesh, The

Dhaka Stock Exchange Limited suspended its trading and other administrative

activities in 1971 after the independence of the country later 1976 it regimes it

activities with 9 listed companies after the changes of government policies.

Activities of the security market improve since 1985 and gained momentum from

early 1991.

Efficient and effective operation of sectors market is required to meet at

least two basic requirements. First one is to support industrialization through

savings mobilization, investment fund allocation and maturity transformation.

Second one is to be satisfy and efficiency in discharging the above role. In the

developing country like Bangladesh such conditions do not prevail due to the

prevalence of informal credit market. It performs various functions in process of

economic development.

In economic development of a county like Bangladesh. The practices and the

supervision of issuers, market and intermediaries are vested upon regulatory

authority. The board of SEC is the policy making and overseeing body and the

regulatory functions are taken care of by chairman and members.


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All the components of securities markets should be concerned with the investors

protection it is essential to say that the legal protection of investors in a country is

an important determinant of the development of its financial markets. Where laws

are protective of outside investors and enforced, investors are willing to finance

firms, and financial markets are both boarder and more valuable.

Keeping this view in mind, the government of Bangladesh has set up

Securities and Exchange Commission (henceforth SEC) on June 8, 1973 under the

security and exchange commission act, 1993. Security Exchange Commission is an

independent quasi-judicial agency of the government, the mission of which is to

administer law in the securities field and to protect investors and the public in

securities transactions. Consistent with the overall policies, SEC is supposed to act

as a central regulatory agency performing wide range of functions covering the

entire capital market including the proper issue of capital, the establishment of fair

trading.


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The SEC Acts, Rules and Regulations

The Securities Acts:

Securities and Exchange Commission Act, 1993:

It is expedient for the establishment of the Securities and Exchange

Commission for the purpose of the protection of interest of investors in securities,

for the development of the securities markets toward achieving the objectives of

the securities investors. To protect the interest of the investors in securities, the

securities and exchange commission can apply all the power under the code of civil

procedures, 1908 (Act V of 1908) with a view to investing into the affairs ofbrokers, sub-brokers, share transfers agents, bankers to an issuer, underwriters,

portfolio managers, investment advisers and such other intermediaries associated

with the dealing in securities markets.

The depository act 1999:

The act has effects on any other law for the time being relating to the

holding and transfer of securities. To avoid any fraudulent a transfer of securitiesmust be effective by making an appropriate entry in the depository register as per

provision of the regulation as per provision, the commission preserves the right, for

the interest of the investors to issue an order and direction to any person associated

with the depository or with the issuer.


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Securities and Exchange Commission rules:

SEC Rules Part-II:

Profit and loss accounts asserts the profitability of a firm. S the profit and

loss account is the disclosure of profit or loss of a company, the commission makes

the listed companies to disclose clearly the result of the working of the companies

during the period cover by the account.

SEC Rules Part-III:

Under the purview of this rule, the assets, liabilities, debts, reserve and other

provision of the listed companies are defined and the treatment of these

terminologies should be compliance with the securities and exchange rules, 1987.

Meeting Rules, 1994:

In exercise of the power conferred by section 25 of the securities and

exchange commission act, 1993 the commission should hold at least six meeting

every year in regards to the matters protecting the interest of the investors.

Credit Rating Companies Rules, 1996:No issue of debt security, or public issue of shares (including rights share) at

a premium, shall be made by an issuer unless the issue is rated by a credit ratingcompany and declaration about such rating is given in the offer document,

prospectus or rights share offer document, as the case may be: Provided that the

Commission may by general order which shall be notified in the official Gazette

grant exemption, in the interest of the capital market, from any requirement of the

rule.

commence business as a credit rating company shall be illegible for registration

under these rules if it fulfils or complies with the following conditions or

requirements, namely:-(a) that such company is incorporated as a public company under the Companies

Act, 1994 (Act No. 18 of 1994).


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Public Issue Rules, 1998:

Any issuer or its representative violating any of the provision of rules or

furnishing false, incorrect, misleading information or suppressing any information

that hampers the interest of the investors, the securities and exchange commission

may impose penalty as prescribed under the securities and exchange ordinance,

1969.

Right Issue Rules, 1998:

To protect the investors interest, the companies offering the right shares

must make and offer the proper documents referring the financial year for which

the dividend is to be declared, date of the dividend declared as per the provision of

the right issue rules, 1998.

Margin Rules, 1999:

In exercise of the power conferred by section 33 of the securities and

exchange ordinance, 1969, SEC controls the members regarding the credit

facilities to their approved clients for securities transactions subject to the margin

account requirements of these rules. Contravention of any of the provisions of

these rules shall be punishable under the provision of the securities and exchange

ordinance, 1969 (XVII OF 1969), the rules and regulations made there under, and

the bye-laws of the stock exchange as well.

Issue of Capital, Rules, 2001:A company (thereinafter referred to as the applicant) intending to issue

capital in Bangladesh shall make an application to the Securities and Exchange

Commission for consent.

The application shall contain the following particulars, namely:-

(a) Name of the company;(b) Address of the registered office;

(c) Telephone number;

(d) Fax number and e-mail number, if any;

(e) Date of incorporation;

f) Date of commencement of business;

(g) authorized capital;


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(h) paid up capital;

(i) amount of capital to be issued;

(j) Face value of shares; and

(k) Period within which capital to be issued.

The applicant whose application has been rejected by the Commission under rule3(4) may apply to the Commission for review of its decision within thirty days

from the date of such rejection, and the decision of the Commission thereon shall

be final.

The applicant shall pay an amount of taka five thousand (nonrefundable) as

application fee, along with the application, by way of pay order or demand draft

issued in favor of the Commission.

OVER-THE-COUNTER RULES, 2001:

The issuer of an unlisted or delisted security shall apply to the exchange, as

designated by the Commission, through a stock dealer/ stock-broker in the form

prescribed by the exchange

For availing the OTC facilities for buying or selling of such security on payment of

prescribed fee, etc. to the exchange.

The exchange shall receive, in advance, the securities at OTC from the sellingstock-dealer/stock-broker against issuance of an official receipt to him mentioning

details of such security, including the selling price, commission or charges

separately, for subsequent payment to the selling stock dealer/stockbroker after

sale of the concerned securities by the exchange.

PUBLIC ISSUE RULES (Review), 2006:

Upon receiving the consent of the Securities and Exchange Commission tothe issue of capital under this Rules, the abridged version of the prospectus,as approved by the Commission, shall be published by theissuer in four national

daily newspapers (in two Bengaliand two English), within the time specified in theletter ofconsent issued by the Commission. The full prospectusshall, however,be posted on website of the SEC, stockexchanges, issuer and the issue manager


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RIGHTS ISSUE RULES (Review), 2006:

Conditions to be fulfilled prior to making rights issue-An issuer of a listed security may make rights issue by issuing rights share

offer document subject to compliance with the following.

Pricing and ratio of rights share The issuer of a listed security making rights issue shall determine the price

of its rights share in consultation with the issue manager.

Filing of the application for rights share offer

An application for issuing rights share along with offer document shall be

furnished to the Commission for approval within fifteen days of approval of such

issue by the shareholders of the company in a general meeting.

Public announcement for rights issue-The issuer of a listed security making offer for rights issue shall:-Announce

two separate dates, for record date, one for shareholders decision regarding the

proposed rights issue and the other for determination of entitlement of rights issue

after the Commission accords approval.

Approval fee on rights share.

The issuer of a listed security shall deposit approval fee with the

Commission for the rights issue at 0.15% of the total offered amount of rightsissue, including premium, if any, by a bank pay order or demand draft issued in

favor of the Securities and Exchange Commission within seven working days

from the date of according said approval.

SubscriptionSubscription shall be received through the banker to the issue during the

subscription period of not less than fifteen days and not more than thirty days.

Netting facilities Rules, 2007:

The Securities and Exchange Commission on 30 January 2008, in the in the

Interest of investors and securities market, rescinded its Directive No-

SEC/SRMID/94-231/1356 dated 30 July 2007, which shall be effective from the

trading day of 3 February 2008. The 30 July 2007 directive had suspended the

mechanism for adjustment of total buy with total sale of scrips.


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Opening branch offices of brokers Rules, 2008:

The SEC has prepared a guideline in the interest of investor and

development f securities market which will be followed by Brokers to obtain

approval of the Commission prior to opening branch offices.

Maximum rate of margin loan Rules, 2008:

As per SEC Order dated February 03, 2008, the maximum rate of margin

loan for Merchant Banker (Portfolio Manager) has been re-fixed @ 1:1 by SEC.

Based on this, Merchant Banker (Portfolio Manager) can provide loan to their

clients up to that ratio with effect from.10th

February,2008 until further Order. Incase of Considering market price of portfolio/securities, the Instruction no. 7 of

SEC (Merchant Banker & portfolio Managers) Regulations, 1996 must be ensured.

the earlier order of SEC dated 25th

November 2007 Regarding this issue will be

considered as amended.

Securities and exchange Commission regulations:

Merchant Banker and Portfolio Manager Regulations, 1995:

The merchant banker shall preserve books of accounts and other books and

documents maintained for a period of twelve years. In this connection, no

merchant banker or any of its directors, partners or managers or any officer o

N their respective accounts or associates or relatives can enter into any transaction

in securities of the company on the basis of unpublished price-sensitive

information obtained by them during the course of nay professional assignmenteither form the customers or otherwise under the provision of merchant banker and

portfolio manager regulation, 1995.


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Prohibition of Insider-trading Regulation, 1995:

Under the section 25 of the securities and exchange commission act, 1993

(XV of 1993) transaction of any security by any insider on the basis of price-

sensitive information is prohibited. If any person being a stock broker or stock

dealer or authorized representative or any other intermediary licensed for dealing

in securities contravenes the provision of this regulation, the securities and

exchange commission may cancel or suspend it license. The commission may also

take different necessary actions according to the law in force against any person

concerned failing to produce any document, books of accounts or any other

information in accordance with the direction of the inquirer working for the

commission.

Appeal Regulation, 1995:

Any person being any company, body incorporate, partnership firm of any

other organization aggrieved by an order of a member or an officer of the

commission may prefer an appeal to the commission under the securities ad

exchange commission (Appeal) regulation, 1995.

Mutual Fund Regulation, 1997:

In exercise of the powers conferred by section 25 of the securities and

exchange commission act, 1993 (Act No, 15 of 1993), the commission makes some

regulations to protect the interest of the investor, as for example, a penalty of

cancellation of registration of mutual fund may be imposed when indulges in

manipulation of price rigging or any activity affecting securities markets and the

investors interest as well. Action may also be taken against mutual funds when itsfinancial position deteriorates to such an extent that the commission may consider

that its continuance is not in the interest of the investors.


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Depository Regulation, 1999:

Under the purview of the depositories act, 1999, the securities and exchange

commission, by the depositories regulations, 1999 may seek further document or

information for the consideration of an application. If any document or information

furnished to the commission by any depository is found to be incorrect or

misleading in material particular after the grant of the registration certificate, the

said certificate may be cancelled. If the commission finds it not suitable to protect

the interest of and helpful to capital market, it may reject the application

mentioning the reasons thereof.

Self-Regulations:

The stock exchange (both DSE & CSE) regulate and monitor trading and all

activities of broker/dealer and the listed firms as well for the benefit of the

investors and for the safeguard of the financial system. The exchanges regulate

themselves as part of combined effort involving the SEC itself and member firms.

During a typical trading f=day the exchanges continuously monitor all market

participants. They also monitor the performance of brokers, dealers and specialists

in their responsibilities for maintaining a fair and orderly market on the stocks they

are dealing. After the market crash in 1996, DSE has instituted several measuresone of which is called circuit-breaker to reduce the market volatility and serve

the investors best interest.

Bangladesh Association of Publicly Listed Companies (BAPLC):

BAPLC is a trade association formed by the public listed companies in the

stock exchange to enhance the self-regulation of the securities industry. In

collaboration with the commission it watches the matters relating to the interest of

the investors and the capital market as well.

For the better understanding of the market indicators, the DSE has established a

new selective index of best 20 companies entitled DSE-20 from January 2001

and CSE did the same thing with best 30 companies listed with it entitles CSE-

30 form January 2000.


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Dhaka Stock Exchange

The Dhaka Stock Exchange (DSE) is registered as a Public Limited

Company and its activities are regulated by its Articles of Association rules &regulations and bye-laws along with the Securities and Exchange Ordinance, 1969,Companies Act 1994 & Securities & Exchange Commission Act, 1993.

The Necessity Of Establishing A Stock Exchange In The Then East Pakistan

Was First Decided By The Government When, Early In 1952.It Was Learnt That

The Calcutta Stock Exchange Had Prohibited The Transactions In Pakistani Shares

And Securities. The Provincial Industrial Advisory Council Soon Thereafter Set

Up An Organizing Committee For The Formation Of A Stock Exchange In East

Pakistan. A Decisive Step Was Taken The Second Meeting Of The Organizing

Committee Held On The 13th March ,1953.

It Was Also Decided That Membership Fee Was To Be Rs.2000 And

Subscription Rate At 15 Per Month. The Exchange Was To Consist Of Not More

Than 150 Members. A Meeting Of The Promoters Was Held At The Chamber On

03.09.1953 When It Was Decided To Appoint Orr Dignam & Co., Solicitors To

Draw Up The Memorandum And Articles Of Association Of The Stock Exchange

Based On The Rules Of Stock Exchange Existing In Other Countries And Taking

Into Account Local Conditions.

The 8 Promoters Incorporated The Formation As The East Pakistan StockExchange Association Ltd. On 28.04.1954. As Public Company.On 23.06.1962

The Name Aws Revised To East Pakistan Stock Exchange Ltd. Again On

14.05.1964 The Name Of East Pakistan Stock Exchange Limited Was Changed To"Dhaka Stock Exchange Ltd."

On 1.10.1957 the stock exchange purchase a land measuring 8.75 Kattah at

9F Motijheel C/A from the Government and shifted the stock Exchange to its own

location in 1959.


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The DSE Acts, Rules and Regulations

Dhaka Stock Exchange rules:

Circuit Breaker Rules, 2004:

Since March 20, 2004 circuit breaker has been withdrawn from Z category

shares have been widen. Share prices under these categories are now allowed to

fluctuate between 7.5% and 20% depending on days market value per share. The

existing circuit breaker limits on A, B & G category shares are as follows:

Up to Tk. 200 20% but not exceeding to Tk. 35

201 to Tk. 500 17.5% but not exceeding to Tk. 75

501 to Tk. 1000 15% but not exceeding to Tk.125

1001 to Tk. 2000 12.5% but not exceeding to Tk. 200

2001 to Tk 5000 10% but not exceeding to Tk. 375

5001 & above 7.5% but not exceeding to Tk. 600

Investors Portfolio account Rule, 2004:

Transaction of the foreign Portfolio Investors As per directive of Securities and

Exchange Commission dated 8th

October 2002 all transactions of the foreign

Portfolio Investors in the secondary market are to be made either through portfolio

accounts opened with a portfolio Manager registered under the Securities and

Exchange Commission (Merchant Banker and Portfolio Manager) Rules, 1996 or

through non-resident investors having accounts with a schedule Bank in

Bangladesh and Exchange Commission for providing custodian banking services

for investment in shares and securities.


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Settlement and Clearing Period Rules, 2004:For A, B and G category securities, the settlement and clearing period have

been further changed in the following manner:

For Settlement T+1= between broker/ dealer and clearing houseFor Clearance T+3= between clearing house and broker/ dealer

Treasury bond Rules, 2005:

For the interest of the investors and securities market, transactions of the Govt.

Treasury Bonds started in the Dhaka Stock Exchange on January 01, 2005 as per

Directive of SEC. The bondholders can receive coupon interest on the government-

approved securities on a half-yearly basis after deduction of taxes as follows:

Name of the Securities Coupon rate

a) 5 years Bangladesh Govt. Treasury Bond 7.5% payable on half-yearly rest

b) 10 years Bangladesh Govt. Treasury Bond 8.5% payable on half-yearly rest

Settlement cycle for Z category companies changed Rule, 2006:

The settlement cycle for Z Category Company (as per the decision of SEC)

changed to T+3 and T+7 instead of existing settlement cycle of T+4 and T+7,

which came into effect on December 17, 2006.

Inter-category Financial Adjusting Facilities Provided Rules, 2006:

According to a decision of SEC on December 5, 2006 inter-category

financial adjustment facilities will be provided in respect of transactions in A, B, G

and N category scraps in this decision also allowed financial adjustment facility to

B, G and N categories also, in addition to A. Due to this decision any investor

can buy any securities under A, B, G and N categories against sale proceeds of any

securities under those categories in the same day with the effect from December

10, 2006. This facility is allowed in the Public, Block and Odd Lot Market only

and Spot and Foreign Market will remain out this facility


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Deferment of compliance of margin rules, 2006:

SEC has decided to keep in abeyance the Compliance of Margin Rules 1999

by brokers/dealers. Due to the decision, the stock brokers/dealers. Due to the

decision, the stoke brokers are now allowed to execute purchase or transaction of

shares on behalf of an investor without instant cash or pay order.

BO Accounts Annual Fee Rules, 2007:

The Securities and Exchange Commission (Depository Act, 1999 and

Section-17) in a notification ordered all the Beneficiary Owner (BO) Account

holders to deposit Tk. 300 for very account per year within a fixed time. On failure

of payment of the said amount of money the BO account will be cancelled. To

facilitate the fair flow of securities trading and to encourage a completely fair

ground for the real investors the SEC undertook this Strategy.

Bank Statement containing particulars for BO Accounts Rules, 2007:

The SEC, in an order (Depository Act, 1999, Section -14) instructed all to

Submit Bank Statement Containing Applicants name, Bank Account No, and alsosignature at the back of photographs which must be similar to the signature he or

she gave at the time of opening the Bank Account. On failure of providing Bank

Statement following these terms and conditions the BO Accounts will be closed

after six months.

Margin Rule, 2007:

The SEC, according to its (Merchant Bankers Rule and Portfolio Manager )

Rules, 1996 and Section-36 (Direction-6, (1), remixed the maximum use of 1:0,5

which come into effect on November-26, 2007 and until further notice disbursable

loan meaning half of clients capital (cash and security) may be disbursed.


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Transfer of IPO securities from Closed BO accounts Rules, 2008:

The commission receives requests from individual investors and issuers on

behalf of investors for to transfer of IPO securities from the respective investors

closed BO accounts to New BO accounts. For this purpose the investors/issuers arerequired to send applications to SEC attaching the copies of old BO account set up

reports and its closing reports, new BO Account set up reports, IPO securities

allotment letters and other relevant papers. The commission examines the

consistency of information contained in the said documents in according approval

to transfer of securities. Henceforth, until further order, the concerned issuers will

examine the aforesaid papers and after being satisfied the respective issuers will

approve transfer of IPO securities from closed BO accounts to new BO accounts.In such cases no approval is required from SEC.

Dhaka Stock Exchange Regulation:

DSE Investors Protection Fund Regulations, 1999:

It is expedient to frame regulations for establishing a fund for the protection

of the investors of defaulting member of the DSE. In exercise of the powers

conferred by section 34 of the securities and exchange ordinance, 1969 (Ord. XVII

of 1969), the DSE makes, with the approval of the securities and exchange

commission, the board of trustees of the fund to have the entire control over the

administration and management of the fund and shall be vested with all the powers

authorities and discretion necessary or expedient for that purpose in addition to any

express powers conferred by these regulation.

DSE Automated Trading Regulations, 1999:

In exercise of the powers conferred by section 34 of the securities and

exchange ordinance, 1969 (Ord. XVII of 1969), the DSE may regulate the market

control parameters such as tick size, market lot, minimum block size, maximum

block size, minimum order size, maximum order size, closing price minutes,

closing price traders, circuit breaker, circuit filter, market protection percentage,


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index calculation frequency, etc. under intimation to SEC. however, the system

shall automatically enforce the price limit regulation/orders, which shall reject any

order beyond the price limit set under the price limit regulation/orders. Being

empowered under this regulation the DSE may also regulate the net limit for a

member. A member exceeding the limit shall be automatically suspended by thesystem under immediate intimation to SEC.

Members Margin Regulations, 2000:

The Securities and Exchange Commission has further modified the

regulation of Members Margin, 2000 as follows :

Regulation 3 has been substituted as the following-3. Free limit up to Tk. one crore

per trading day Regulation 4(3) has been substituted as the following

Every member shall deposit the members margin with the clearing house on the

additional trade exposure at the following rates:

A) Above Tk one crore @20%

B) Above Tk two crore @30%

C) Above Tk three crore @50%

D) Above Tk five crore @100%

Direct listing of public limited company, 2001:

Dhaka Stock Exchange Ltd. (Direct listing of shares of public limited

company) Regulation. 2001 has come into effect from 9th

October, 2001. For the

first time in the history of Bangladesh Capital Market, public limited companies

will the DSE. Companies having a paid-up capital of at least Taka three core and

operational performance for at least three years with two years profit record,

without having any accumulated loss in its financial statement and having no

record of annual general meeting default will qualify to get listed with the DSE.


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Pay off declared Dividend Regulation, 2004:

If A or B category company fails to pay off declared dividend within the

prescribed time limit its share shall be placed in Z category. On the other hand ifa Z category company declares dividend its shares shall be placed in A or B

category as the case may from the next day of SEC, confirming paying off the

declared dividend within the prescribed time limits.

Direct Listing Regulation, 2005:

To facilitate the companies with good fundamental to offload a part of its existing

shares through capital market, SEC has approved direct listing regulation. Now

interested and sound companies can get listed on the bourses directly and enabling

them to sell their shares to investors directly without the rigidity of floating shares

through IPO. The requirements for eligibility of a company to get listed directly

are:

- shall have minimum paid up capital of Tk. 100.00 million- shall have no accumulated loss- shall be commercial operation for at least immediate last five years- Shall have profit in three years out of the immediate last five completed

accounting/financial years with steady growth pattern.

- Is regular in holding Annual General Meeting (AGM).

Corporate Governance Guidelines Regulation, 2006:

SEC has launched corporate governance guidelines for the listed companies on

comply or explain basis aiming to ensure corporate governance accountability

and practices in Bangladesh. This includes provisions, for the first time, to

constitute an audit committee and to appoint independent directors in a listed

company.


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Sponsors or directors of Z-category companies Trading Regulation, 2008:

The Securities and Exchange Commission on 15 January, 2008 in a

notification said in the interest of investor and securities market, the sponsor or

director of companies listed on the stock exchanges and placed under 7 ere goryshould be barred from trading for implementing the Notification

No.SEC/CMRRCD/2001-14/Admin/03/06dated 1st

August 2002, published in

Bangladesh Gazette on 7th

August 2002, for tasty being. Now, therefore, with a

view to facilitating the above, the Securities and Exchange Commission, in

exercise of the power conferred by section 20A of the Securities and Exchange

Ordinance Stock Exchange to ensure that no sponsor or director shares of those Z

category at Dhaka Stock Exchange and Chittagong Stock Exchange to ensure that

no sponsor or director shares of those Z Category companies, excluding bank,

insurance and financial institution, are transacted on the stock exchanges or

transferred outside the stock exchange in any other from until further order.

The Share price movement Regulation, 2008:

The Securities and Exchanges Commission on 16 January 2008 directed the

Dhaka Stock Exchange and Chittagong Stock Exchange to make the following

further amendment in the existing Guideline for Regulating the Share price

Movement in the Stock Exchanges Trading, which Shall take effect from 17

January 2008, namely The existing price limit prescribed for A,B,G, and N-

Category companies shall also be applicable for Z-category companies

Documents

Govern Rules & Regulation to p0rotect Investor