Securities and Exchange Commission
Securities and Exchange Commission is a government body under the ministry of finance established to regulate the securities market in Bangladesh. It was established on 8 June 1993 under the Securities and Exchange Commission Act 1993. Prior to its establishment, the securities market was regulated under Capital Issues Act 1947. The main office of SEC is at Dilkusha Commercial Area, Dhaka.
SEC is headed by a chairman appointed by the government and has four members under the chairman. Two of the members are full-time executives and are nominated directly by the government. Of the other two, one is a nominee of the bangladesh bank and the other, of the ministry of finance. The members are responsible for registration, capital issue, corporate audit, administration and finance, supervision and monitoring the corporate and legal affairs, research and development, and education and training. In addition to members, there are four executive directors, one corporate accountant, and one legal counselor.
The prime objectives of SEC are to protect integrity of the stock market and the interests of the investors in securities, to develop the securities market, to ensure proper issuance of securities, and to promulgate new laws, orders, rules and regulations for controlling, and guiding the securities market. SEC is to protect the interests of investors through regulating the market within the framework of the SEC Act. It approves capital issues and prospectus, restricts illicit transactions and insider trading, and controls the stock exchanges, securities related firms, and companies involved in the public issue of securities. As a part of these functions, SEC monitors disclosure functions of the companies, timely holding of annual general meetings by them, timely payment of dividends and timely issuance of allotment letters and refund warrants by security issuers.
Since its inception in 1993, SEC plays a significant role in the securities market. A major function of SEC is to curb the irregularities prevailing in the market. To control and raise the efficiency of the market, SEC promulgated the following orders and regulations since 1993: (a) Securities and Exchange Commission (stock broker, stock dealer and authorised representative) Regulation 1994; (b) Securities and Exchange Commission (merchant banker and portfolio manager) Regulation 1995; (c) Securities and Exchange Commission (mutual fund) Regulation 1997; (d) Credit Rating Rules 1997; (e) Securities and Exchange Commission (control of insider trading) Regulation 1995; (f) Public Issue Rules 1998; (g) Right Issue Rules 1998; and (h) Depository Act 1999.
SEC issues/cancels registration certificates to stock dealers, brokers, merchant banks, authorised representatives of members, and all intermediaries working in the securities market. Market surveillance is an essential activity of SEC. It analyses the price fluctuations in both Dhaka and Chittagong Stock Exchanges. As part of supervision and regulation of markets and its intermediaries, SEC receives and takes initiatives to settle complaints against stockbrokers and firms/companies and takes actions, including charging fines and issuing warnings for detected irregularities. It also takes legal steps against the defaulting companies and firms.
SEC conducts research on the dealing behaviour in the securities market and regularly publishes the findings. SEC has a number of informative publications, which includes Annual Report of SEC, Quarterly Reviews and the SEC Parikrama (Bangla). It also periodically publishes manuals and handbooks. To educate the investors and intermediaries SEC implements some programmes including investors' training for corporate and individual investors and training programmes for authorised representatives of the members of DSE and CSE. [Ishtiaque Ahmed Khan]