SEC Annual Report,1998-99 

Significant Events: 1998-99
  • Dhaka and Chittagong Stock Exchange started automated on-line trading
  • Computer Terminal with necessary surveillance software set up at the SEC to monitor the daily trading of the Chittagong Stock Exchange and watch of DSE trading through a non-trading version monitor
  • Right Issue Rules 1998 issued
  • Asian Development Bank Technical Assistance Project “Capacity Building of SEC and Stock Exchanges” commenced
  • Notification for adopting telephonic buy  and sell orders by stock brokers and stock dealers issued
  • Approved amendments to the Listing Regulations of stock exchanges requiring company’s directors to inform in advance buy and sell of their shares
  • Reform Committee comprising representatives of SEC, DSE and CSE was set up to monitor the reform measures suggested by ADB.
  • Time stamping of written orders made obligatory by amending the Securities and Exchange Rules 1987. The amendments were made with a view to eliminating front trading by stock brokers and stock dealers
  • Amended Securities and Exchange Rules, 1987 to remove the Counter Part Identification Facility from the automated on-line trading of the stock exchanges
  • Amended Settlement of Stock Exchanges Transactions Regulations, 1998 envisaging stern measures for defaulters who will fail to deliver securities or make payment within stipulated time period.
  • Approved Margin Rules 1999 to facilitate proper administration of the margin/credit facilities usually extended by the stock brokers to their clients and to enhance liquidity in the stock market
  • Gazetted Public Issue Rules 1998
  • The Depository Act, 1999 was passed by the Parliament
  • Approved automated trading regulations of Chittagong Stock Exchange
  • Prepared modalities for net capital requirement of members of stock exchanges
  • Granted exemption to Investment Corporation of Bangladesh under section 23 of SEC Act, 1993 from the provision of section 10 of the Act and Regulations 3 and 16 of SEC (Merchant Bankers & Portfolio Managers) Regulations 1996 for undertaking merchant banker and portfolio managers’s function up to 31 December 1999
  • Extended time limit for the un-registered merchant bankers to act as underwriters up to 31 December 1999
  • Introduced Investors Account Opening Form 
  • Introduced segregation of the customers’ asset and liabilities from the members’ own asset and liabilities relating to securities business
  • Revised the exchange membership qualification and inclusion of provision for membership cancellation on disqualification 
  • Amended Securities and Exchange Rules, 1987 requiring the exchange members to prepare and audit the financial statements and furnish yearly audited financial statements to SEC on regular basis; requiring the exchange members and the stock exchanges to regularly report on maintaining net capital balance and action taken by the exchange for the failure of members concerned; requiring the exchange members and security issuers to have their accounts audited by the SEC appointed auditors at their costs as and when required by SEC in the public interest
  • Approved authentic English version of Depository Act, 1999
  • Granted exemption from the requirement of SEC approval for raising of sponsors’ capital by public limited company

Year 2000 Computer Issue

SEC has been closely monitoring the Year 2000 preparedness of stock exchanges, market intermediaries and listed companies. It has also taken steps to make sure that the Commission itself is Year 2000 compliant. 

A 5 members Committee to deal with the issue was formed by SEC. Based on the recommendations of the Committee SEC took steps. SEC has created a home page on Y2k status of stock exchanges, market intermediaries, listed companies in its web site for investors’ information. Both the stock exchanges will publish the status of Y2k readiness in the national dailies as soon as they complete testing of trading system hardware of the brokers/dealers. 

Training and Development

During the year, internal training program on professional and technical course was organized for SEC staff. For the coming year focus on staff training will be given importance for the development and improvement of staff skills at all levels.

In 1998-99 officers were sent to the United States Securities and Exchange Commission (US SEC) to attend training courses organized by US SEC. Three officers attended the 1998 IOSCO Seminar Training Program held in Montreal, Canada. Besides, under the training budget of UNDP-TA officers from all departments of SEC attended on-the-job training program organized by securities market regulatory agencies like Securities and Exchange Board of India, SEC Thailand, SEC, Sri Lanka and Monetary Authority of Singapore as per our request. 

Future Plan 2000-2002

SEC has designed its future plan of work for the development of capital market. 

  • Developing rules and regulations on options, futures/derivatives/swaps/over the counter market, depository receipts facilities, commercial papers.
  • Training of SEC personnel on various aspects of securities and capital market including market technology, securities related dispute resolution, dealing with internet product, corporate governance, effective supervision and control of capital market intermediaries in order to safeguard investors interest
  • Inspection, examination, compliance and supervisory standards for securities firms/SROs
  • Making regulations on enterprise development and venture capital
  • Framing of Rules for introducing Internet Trading facilities
  • Material preparation, curricula development and conducting professional examination for securities industry professionals to raise performance standards and enhance efficiency
  • Outline plans to introduce new products into our capital market
  • Making Regulations on foreign institutional investors
  • Making Regulations on take over and merger
  • Framing of Rules for introducing Electronic Fund Transfer 
  • Making stock exchanges strong, efficient and effective SROs keeping in view an expanding capital market and needs and prospects of the coming century
  • Central Clearing with risk management
  • Supervision of Central Depository System 
  • Legal frame-work: law framing, reviewing existing laws, rules and regulations, and amendments thereof to meet the requirements of time; implementation and enforcement strategy
  • Investor awareness and education: publications, training, seminar, workshop, slides film making on the role, importance and contribution of capital market in national economy and progress
  • Strengthening the support for institutional investors in the market.

Launching of Web Page

SEC launched its Web Page on Internet. The Web Page contains information related to SEC’s laws, Publications, Investors Information, listed companies affairs and other activities of securities markets. Address of the web page is