ABOUT SEC

ABOUT SEC
The Securities and Exchange Commission (SEC) was established on 8th June, 1993 under the Securities and Exchange Commission Act, 1993. The Chairman and Members of the Commission are appointed by the government and have overall responsibility to administer securities legislation. The Commission, at present has three full time members, excluding the Chairman. The Commission is a statutory body and attached to the Ministry of Finance.
Members perform the following functions:
Serve as the members of the Commission and supervise its management. Provide policy direction to industry and staff and promulgate legally binding rules. Act as an administrative tribunal for decisions on the capital market.
Mission of the SEC is to:
Protect the interests of securities investors. Develop and maintain fair, transparent and efficient securities markets. Ensure proper issuance of securities and compliance with securities laws.
Commissions main functions are:
Regulating the business of the Stock Exchanges or any other securities market. Registering and regulating the business of stock-brokers, sub-brokers, share transfer agents, merchant bankers and managers of issues, trustee of trust deeds, registrar of an issue, underwriters, portfolio managers, investment advisers and other intermediaries in the securities market. Registering, monitoring and regulating of collective investment scheme including all forms of mutual funds. Monitoring and regulating all authorized self regulatory organizations in the securities market. Prohibiting fraudulent and unfair trade practices relating to securities trading in any securities market. Promoting investors education and providing training for intermediaries of the securities market. Prohibiting insider trading in securities. Regulating the substantial acquisition of shares and take-over of companies. Undertaking investigation and inspection, inquiries and audit of any issuer or dealer of securities, the Stock Exchanges and intermediaries and any self regulatory organization in
the securities market. Conducting research and publishing information.

The Commission
Mr. Faruq Ahmad Siddiqi, Chairman Mr. Saleh Ahmed Chowdhury, Member Mr. Mohammad Ali Khan, Member Mr. Mansur Alam, Member
Principal Officers:
Capital Market Regulatory Reforms & Compliance:

Mr. Mohammad Abdul Hannan Zoarder, Executive Director Mr. A.K.M. Ziaul Hasan Khan, Director.
Administration:
Mr. Md. Saifur Rahman, Director Mr. Mohammad Abul Hasan, Deputy Director Mr. M.A. Maleque, Accounts Officer
Corporate Finance:
Mr. Shuvra Kanti Chowdhury, ACA, Executive Director
Mr. Md. Hasan Mahmud, Director Mr. Mir Mosharraf Hossain, Deputy Director Mr. Md. Abul Kalam, Deputy Director
Chairmans Office:
Ms. Farhana Faruqi, Assistant Director
CDS:
Mr. Farhad Ahmed, Executive Director
Enforcement:
Mr. M. Mizanur Rahman, Director Mr. Mohammad Jahangir Alam, Deputy Director Mr. Prodip Kumar Basak, Deputy Director Mr. Md. Monsur Rahman, Deputy Director
Capital Issue (Initial Public Offering has been renamed):

Mr. Farhad Ahmed, Executive Director Mr. M. Mahbubul Alam, Director. Mr. Kamrul Anam Khan, Deputy Director
Law:
Mr. M. Mizanur Rahman, Director Mr. Mahbubur Rahman Chowdhury, Deputy Director
Management Information Systems:

Mr. Md. Ashraful Islam, Director Mr. Rajib Ahmed, Deputy Director
Registration & Licensing:
Ms. Ruksana Chowdhury, Executive Director Mr. Md. Anowarul Islam, Director Mr. Md. Mahmoodul Hoque, Deputy Director
Finance:
Mr. Md. Saifur Rahman, Director Mr. Mohammad Rezaul Karim, Deputy Director
Research & Development:

Mr. Mohammad Abdul Hannan Zoarder, Executive Director Mr. Shafiul Azam, Deputy Director
Supervision & Regulation of Markets and Intermediaries:

Mr. Mohammad Abdul Hannan Zoarder, Executive Director Mr. Md. Ashraful Islam, Director Mr. Ripan Kumar Debnath, Deputy Director Mr. Sheikh Mahbub Ur Rahman, Deputy Director Ms Farhana Faruqi, Assistant Director
Surveillance :
Mr. Md. Anwarul Kabir Bhuiyan, Executive Director Mr. Mohammad Rezaul Karim, Deputy Director
World Bank Project Mr. Mohammad Abdul Hannan Zoarder, Executive Director
ADB Project Mr. Md. Anwarul Kabir Bhuiyan, Executive Director
On Education Leave Mr. ATM Tariquzzaman, Executive Director
Advisory Committee
Members of SEC Advisory Committee
No. SEC/Chairman-6/42/95/644 2006
December 27,
Notification
Further to the Commissions Notification No. SEC/Chairman-6/42/95/529, dated October 22, 2006 issued in connection with the constitution of the Advisory Committee of Securities and Exchange Commission, this is for information for all concerned that the person mentioned against serial number 11 shall be replaced by the following namely:
``11. Chairman, Bangladesh Leasing and Finance Companies Association.
By order of the Commission
Md. Saifur Rahman Director (Administration)
No. SEC/Chairman-6/42/95/529 2006
October 22,
NOTIFICATION
Under the provision of section 27 of Securities and Exchange Ordinance, 1969 (Ordinance No. XVII of 1969), the Securities and Exchange Commission has constituted an Advisory Committee with the following persons until further orders:
01. Chairman, Securities and Exchange Commission 02. Member (Admin & Finance), Securities and Exchange Commission 03. Member (Law), Securities and Exchange Commission 04. Member (CF), Securities and Exchange Commission 05. Additional Secretary, Banking Division, Ministry of Finance 06. One Deputy Governor of Bangladesh Bank to be nominated by Bangladesh Bank 07. Managing Director, ICB
08. President, ICAB 09. Managing Director, CDBL 10. President, BAPLC 11. President, Association of Financial Institution, Bangladesh 12. President, FBCCI 13. President, MCCI 14. President, DCCI 15. President, Dhaka Stock Exchange 16. President, Chittagong Stock Exchange 17. President, Chittagong Chamber of Commerce and Industry 18. President, Rajshahi Chamber of Commerce and Industry 19. President, Khulna Chamber of Commerce and Industry 20. President, Sylhet Chamber of Commerce and Industry 21. President, Barisal Chamber of Commerce and Industry 22. Professor Abu Ahmed, Department of Economics, Dhaka University 23. Dr. Zaid Bakht, BIDS 24. Mr. Sheikh Abdul Hafiz, FCA 25. Mr. Moazzam Hossain, Editor, The Financial Express 26. Mr. Nasir A Chowdhury, Ex. President, Bangladesh Insurance Association
Terms of Reference
i. ii.
To propose appropriate policy options for developing the capital market of the country; To advise on policies and programs to protect the interest of investors in securities;
iii. To advise on any other matter as may be referred to by SEC.
2. An institution or individual with special knowledge of the subject matter may be invited to any meeting of the Committee. 3. The Committee may hold meeting at any time considered necessary by the Commission 4. Chairman, SEC will act as Convener of the Committee.
Hours of Operation
The Commission is open from 0900 to 1700 Bangladesh Standard Time (GMT + 6), Sunday to Thursday. Friday and Saturday are the weekly holidays.
SECURITIES AND EXCHANGE COMMISSION ANNUAL REPORT 2003-2004 Securities and Exchange Commission
Jiban Bima Tower (15,16 & 20 Floor) 10, Dilkusha Commercial Area Dhaka-1000, Bangladesh
Phone: 9568101-2, 9561525
Website: http//:www.secbd.org E-mail: secbd@bdmail.net Fax: (88)-02-9563721
CHAIRMANS STATEMENT
The Securities and Exchange Commission (SEC) was established on June 8, 1993 under the Securities and Exchange Commission Act 1993 (Act 15 of 1993) as a capital market regulator with a view to ensuring proper issuance of securities, protection of the interest of investors in securities, development of the capital and securities markets, and regulation of the capital and securities markets in Bangladesh. The Commission consists of a chairman and four full time members who are employed by the government for a period of three years renewable for another similar term. The services of the chairman and members of the Commission are also determined by the government. The Chairman is the chief executive officer of the Commission. The countrys capital market witnessed a remarkable turn-around during the fiscal year 2003-2004. There were unmistakable signs of the resurgence of investors confidence which suffered a major jolt in the wake of the catastrophic crash of the stock market in 1996. Dhaka Stock Exchanges (DSE) general index which was introduced on 27th November 2001 with a base of 818 points hardly moved in the following two years with the index increasing by merely five points to reach 823 on 30 th June 2003. A significantly higher level was attained during the following year with the index rising to 1319 as of 30 June 2004. Parallely, Chittagong Stock Exchanges index rose from 1841 as of 30 th June 2003 to 2329 as of 30th June 2004. The momentum of growth persisted through the subsequent months. Market capitalization at DSE increased from Taka 69 billion on of 30th June 2003 to Taka 142 billion as of 30th June 2004. The above developments in the capital market were fostered by several macroeconomic measures. The budget for 2003-2004 provided that a rebate of 10 percent of the income tax would be allowed if a listed company declared 20 per cent dividend; no questions were to be asked by the tax authority as to source of income if investment was made in the shares of listed companies; and there was a corporate tax differential amounting to 7.5 percent between listed companies declaring at least 10 percent dividend and others. Dividend income was made tax-free in the hands of the recipient. The Government and the Bangladesh Bank took steps to reduce interest rates on the saving instruments and bank deposits. The macroeconomic measures were complemented by a number of initiatives implemented by the Securities and Exchange Commission (SEC). These were primarily aimed at ensuring smooth and orderly functioning of the capital market. A brief outlines of these initiatives is presented below: SEC intensified dialogue with various market actors - issuers, members of the stock exchange, merchant bankers, auditors etc. A consultative Committee was set up consisting of SEC officials and the Chief Executive Officers of DSE and CSE to discuss market-related developments and propose appropriate corrective actions.
Monitoring role of SEC was strengthened to ensure that the market actors fulfill their duties and obligations. A system of regular inspection of brokerage houses was put in place. The submission of half-yearly and annual accounts and holding of annual general meetings were closely monitored. Surveillance over the prices and trading volumes of individual scrip was strengthened. These led to a number of enforcement actions, including suspension of trading in shares of 16 companies. Central Depository Bangladesh Limited (CDBL) has started commercial operation upon receipt of business commencement certificate from the Securities and Exchange Commission on December 23, 2003. Now on, the issuance of primary shares through public offering has to be made through CDBL in dematerialized form that would enhance the transparency and bring dynamism in the capital market. The dematerialization of securities listed on the stock exchanges began on December 24, 2004, and 15 companies were brought within the fold of central depository system by 30th June 2004. These companies account for 22.02 % of market capitalization. The remaining securities listed on the exchanges would be dematerialized in phases. Apart from the above, CSE has introduced internet trading system with effect from 30th May 2004. The Commission accorded registration to Credit Rating Agency of Bangladesh Ltd (CRAB) on February 24, 2004 that increased the number of registered credit rating company into two. With the operation of new credit rating agency, it is expected that competition would result in improvement of quality as regards credit rating. In Bangladesh, rating is mandatory for issuance of debt instruments through public offering, issuance of rights shares and issuance of shares at premium. The Securities and Exchange Commission introduced a new system for IPO distribution to attract small investors towards capital market. In this respect, all the applicants shall be treated as applied for a single lot of securities. If there is over subscription, then lottery shall be held amongst the applicants allocating one identification number for each application, irrespective of the application money. On the other hand, if there is under subscription, then all the applicants shall first be distributed with a single lot and thereafter, for the balance amount, lottery shall be held for the applicants who have applied for multiple lots on the basis of dividing the application money by the amount of a market lot separately. The Securities and Exchange Commission has withdrawn the weighted average index from Dhaka and Chittagong Stock Exchanges for its failure to reflect the fluctuation of price of securities traded on the stock exchanges. To ensure total enforcement of the Anti Money Laundering Law in the country, the Securities and Exchange Commission has issued a notification restricting cash transaction over Tk. five laces for purchase or sale of listed companys shares. In this regard, an investor will have to transact through the banking channel by account payee checks, bank payment order or draft or any other mode of transaction available with the banking system. Beside this, the Securities and Exchange Commission (SEC) is in the process of
finalizing guidelines for election/ appointment of directors and their qualifications with a view to improving corporate governance. The revival of investors confidence amply demonstrated by the sustained upward trend in the stock market indices, market capitalization and the volume as well as value and volume of daily turnover needs to be nurtured. In this context, one can not overemphasize the importance of augmenting the supply of quality scrips. Here the response was at best lukewarm. During the fiscal year under review, SEC could approve only five issues of initial public offering. The total value of issues amounted to Tk. 151.69 crore. The countrys capital market is predominantly equity- centric. Of the total 267 securities traded on the stock exchanges, 248 are equities, 11 mutual funds and eight are debentures. In order to widen the choices available to investors with respect to returns, liquidity and risks, it is crucially important to diversify the instruments available for investment. With this end in view efforts were initiated to introduce asset-backed securities and make long-term government bonds tradable on the stock exchanges. These efforts are expected to be successful within the next few months. To conclude, the capital market of Bangladesh is now poised to play its due role as a conduit for financing investment and thereby making a notable contribution to economic growth, employment creation and poverty alleviation. The progress achieved so far would not have been possible without the active cooperation and support of many parties- the Government, Bangladesh Bank, issuers and market intermediaries. I wish to express my gratitude to all of them. I also acknowledge with thanks the high level of commitment and dedication shown by all my colleagues in the Commission in our joint bid to revitalize the capital market. Dr. A B Mirza Azizul Islam Chairman
Bangladesh Capital Market The Commission:

The Securities and Exchange Commission (SEC) was established on June 8, 1993 under the Securities and Exchange Commission Act 1993 (Act 15 of 1993) as a capital market regulator with a view to ensuring proper issuance of securities, protection of the interest of investors in securities, development of the capital and securities markets, and regulation of the capital and securities markets in Bangladesh. The Commission consists of a chairman and four full time members who are employed by the government for a period of three years renewable for another similar term. The service of the Chairman and members of the Commission are also determined by the government. The Chairman is the chief executive officer of the Commission.
Economy of Bangladesh:
Basic Information Currency : Taka (Tk.) GDP at Current Price : Tk. 4674.97 billion (US$ 68.05 billion) Annual per capital GDP : US$ 482 GDP growth rate at (1995/96) constant price : 6.51 percent Agricultural growth rate at constant price : 2.95 percent Industrial/Mfg growth rate (% of GDP) : 11.19 percent Large & Medium scale Industry : 11.56 percent Small scale Industry : 10.28 percent Service sector growth rate of GDP at current price : 12.45 percent Inflation rate (12 month average) : 7.20 percent Domestic savings rate of GDP: 23.46 percent National savings rate of GDP: 29.15 percent Investment rate of GDP: 24.33 percent Exports (2006-07): US$ 12177.86 mn Imports (2006-07): US$ 17156.80 mn Trade Deficit : US$ 4978.90 mn Foreign Exchange Reserve : US$ 5077 mn Remittances : US$ 5998.47 mn Foreign Investment Direct : US$ 760mn Portfolio : US$ 106 mn Bank rate : 5.0 per cent Broad Money (M2) : 211986.20 crores Total No. of Limited Co. Public Limited Co : 35,000 Private Limited Co. : 23,000
Principle Industries : Garments, Pharmaceuticals, Textiles, Paper, Manufacturing, Newsprint, Fertilizer, Leather and Leather goods, Sugar, Cement, Fish processing, Steel & Chemical industries etc. Major export items : Garments, Tea, Jute, Frozen shrimps, Leather products, Newsprint, paper, Naphtha, Urea, etc. Principle imports : Fuel, Rice, Wheat, Cotton & Textile, Petroleum products, Fertilizer, Staple fibers, yarn etc.
The Dhaka Stock Exchange (DSE) As on 30th June, 2004 there were 267 securities listed with DSE against which total issued capital was Tk.48, 940 million and total market capitalization was Tk.1,42,370 million. The Dhaka Stock Exchange is a self-regulated non-profit organization. It has a 24 members Council of which 12 are elected from the exchange members and 12 are nominated from the non-exchange members by the elected exchange membercouncilors, subject to the approval of SEC. The executive power of DSE is vested in the chief executive officer (CEO) and under the leadership of CEO the executive body conducts the daily affairs of DSE. The board of directors of DSE appoints the CEO with the approval of SEC.
Performance at a glance:
Years Listed Issues No. of Securities % of Annual Growth No. of Securities in mn % of Annual Growth Issued Capital & Debentures -Tk. mn -US$ mn % of Annual Growth Market Capitalisation 267 2.69 1,151.58 12.16 256 (4.12) 1,188.53 3.21 286 11.72 1244.14 4.68 310 8.39 1546.05 24.27 2003 2004 2005 2006
46,055.00 788.61 30.83
49,532.91 832.49 7.55
70,313.00 1,062.77 41.95
118437 1711.52 68.44
-Tk. mn -US$ mn % of Annual Growth Conversion Rate Turnover of Listed Securities Total Turnover Volume in mn Value (Tk. mn) Value (US$ mn) % of Annual Growth Daily Average Transaction Volume in mn Value (Tk. mn) Value (,US$ mn). % of Annual Growth Initial Public Offcring(IPO) NO.of Public Issues Size of Public Offer ~Tk. mn -US$ mn % of Annual Growth Size of Pre IPO Placement -Tk. mn -US$ mn % of Annual Growth Public Subscription -Tk. mn -US$ mn % of Annual Growth Over Subscriptions Times -Value (Tk. mn) % of Annual Growth
897,587.00 1,671.01 236.94 58.4
224,923.00 3,761.25 130.83 59.8
233,075.1 2 3,522.90 3.62 66.16
323367.94 4672.95 38.74 69.2
612.74 19,152.27 327.95 (45.25) 2.14 66.97 1.15 (48.89)
681.38 53,181.71 902.92 177.68 2.55 198.44 3.32 196.33
883.3 64,835.28 979.98 21.91 3.42 251.38 3.8 26.64
797.77 65079.11 1099.3 0.38 3.5 285.43 4.82 13.58
14 1351.17 23.3 582.41 1,626.50 27.85 544.95 26,305.70 453.55 203.89 19.47 310.88
3 473.88 8.1 (64.93) 20.00 0.34 (98.77) 6,233.36 105.83 (76.30) 13.15 (32.44)
17 1265.7 19.13 167.09 145.90 2.21 629.5 15,795.17 238.74 153.4 12.48 (5.13)
7 1433.95 24.22 13.29 146.72 2.47 0.56 15241.93 257.46 (3.50) 10.62 (14.90
Performance of DSE at a glance The Chittagong Stock Exchange (CSE):
As on 30th June, 2004 there were 195 securities listed with CSE against which total issued capital was 44,360 million and total market capitalization was Tk.1,25,910 million. The Chittagong Stock Exchange is also a self-regulated non-profit organization and formation of the board of directors, size and the rules of election of directors are also similar to DSE. The executive power of CSE is also vested in the CEO, and the executive body conducts the daily affairs of the exchange. The CEO is appointed by the Board with the approval of the Commission. Bond Market: The countrys capital market is predominantly equity-centric. Of the total 267 scrips traded on the Dhaka Stock Exchange only eight are debentures issued by the corporate houses. The total outstanding amount against the aforesaid debentures was Tk.230.00 million only as on June 30, 2004. Under Financial Institution Development Project an expatriate firm has also been engaged to suggest a draft of comprehensive rules for issuance, trading, payment and settlement of government, municipal and corporate fixed income securities in Bangladesh. Apart from the above, a few financial institutions, with the regulatory support of Bangladesh Bank and SEC, have taken initiatives for their asset securitization. It is hoped that aforesaid instruments would provide the investors alternative investment options in near future. Raising of capital through Initial Public Offering (IPO): During 2003-2004 fiscal year 10 companies raised Tk.2400 million capital through initial public offering to the general public. Out of the aforesaid 10 companies, five obtained consent from the Commission to raise capital in the fag end of FY. 2002-2003 but subscribed by the general public during 2003-2004. The five companies that received consent from the Commission and subscribed by the general public within FY. 20032004 raised Tk. 1520 million by way of Tk.730 million from the general public, Tk.60 million from foreign placement and Tk.730 million from local placement. Listed Companies: To increase awareness of the investors in the capital market, the listed companies have been categorized as A, B, Z and G based on profit-loss, status of annual general meeting (AGM) and commercial operational status of the companies. A category companies are those which pay 10% or more dividend, B category companies are those which pay less than 10% dividend and Z category companies are which that fail to pay any dividend, hold AGM, and whose accumulated loss exceeded the issued capital or companies which are not in operation for more than six months. As at 30th June 2004 there were 123 A category companies (47.49% of total listed companies), 39 B category companies (15.06% of total listed companies), 96 Z category companies (37.06 % of total listed companies) and only one G category company.
Depository System Started Functioning in the Capital Market: Central Depository Bangladesh Limited (CDBL) has started its commercial operation upon receipt of business commencement certificate from the Securities and Exchange Commission on December 23, 2003. Now on the issuance of primary shares through public offering has to be made through CDBL in dematerialized form that would enhance the transparency and would bring dynamism in the capital market. The dematerialization of securities listed on the stock exchanges began on December 24, 2004, and 15 companies were brought within the fold of central depository system by 30th June 2004. These companies account for 22.02 % of market capitalization. The remaining securities listed on the exchanges would be dematerialized in phases. Merchant Bank: As on 30 June 2004, there were 29 companies that obtained registration certificate from the Commission to work as merchant banker and portfolio manager. Most of them are full-fledged merchant bankers (Issue manager, Underwriter and Portfolio manager). The break-up of the aforesaid 29 companies are given below: (a) (b) (c) Full fledged merchant banker Issue manager Portfolio manager Total 22 6 1 29
The performance of most of the aforesaid companies is not satisfactory. One of the merchant bankers named Saudi- Bangladesh Industrial and Agricultural Investment Company Ltd with the consent of the Commission has stopped operation of its merchant banking wing for the time being. Mutual Fund and Asset Management: As per the Securities and Exchange Commission (Mutual Fund) Rules, 2001 the Commission accords registration to mutual funds. As on June 30, 2004, only ten mutual funds including one managed by AIMS of Bangladesh Ltd, a private sector asset management company, were listed on the stock exchanges. Govt. owned Investment Corporation of Bangladesh issued eight and Bangladesh Shilpa Rin Shangstha (BSRS) issued the remaining one mutual fund. ICB Asset Management Company is going to issue another two mutual funds named "ICAB AMCL Islami Mutual Fund" and "Pension Holders Unit Fund" in the market. In the meantime, the Commission has accorded registration to "ICB AMCL Islami Mutual Fund" and also approved the draft of trust deed of "ICB AMCL Pension Holders Unit Fund" during this financial year. As institutional investor more mutual funds would play a significant role in the capital market. Credit Rating Agency of Bangladesh Limited: The Commission accorded registration to Credit Rating Agency of Bangladesh Ltd (CRAB) on February 24, 2004 that increased the number of registered credit rating
company into two. With the operation of new credit rating agency, it is expected that competition would result in improvement of quality as regards credit rating. In Bangladesh, rating is mandatory for issuance of debt instruments through public offering, issuance of rights shares and issuance of shares at premium. New system introduced for IPO distribution: The Securities and Exchange Commission introduced a new system for IPO distribution to attract small investors towards capital market. In this respect, all the applicants shall be treated as applied for one minimum lot. If there is over subscription, then lottery shall be held amongst the applicants allocating one identification number for each application, irrespective of the application money. On the other hand, if there is under subscription, then all the applicants shall first be distributed with a single lot and thereafter, for the balance amount, lottery shall be held for the applicants who have applied for multiple lots on the basis of dividing the application money by the amount of a market lot separately. SEC-ADB Workshop on Corporate Governance: A two-day long national workshop on Corporate Governance in Bangladesh, jointly arranged by the Securities and Exchange Commission and the Asian Development Bank was held at the Sonargaon Hotel, Dhaka on July 9 to 10, 2003. Another workshop was also jointly organized by the Securities and Exchange Commission and Asian Development Bank at CIRDAP auditorium, Dhaka on 24 May 2004. SEC Chairman Dr. A B Mirza Azizul Islam inaugurated the workshop. Local and expatriate consultants and Commission officials highlighted the various aspects of corporate governance. They also dwelt on aspects that were needed to be implemented to improve the governance scenario in Bangladesh. SEC Formed a Consultative Committee: The Securities and Exchange Commission has formed a three member consultative committee consisting of the senior most executive director of the Commission and CEOs of stock exchanges to discuss the market related issues and recommend appropriate measure for the Commissions consideration. Weighted Average Index withdrawn: The Securities and Exchange Commission has withdrawn the weighted average index from Dhaka and Chittagong stock exchanges for its failure to reflect fluctuation of price of securities traded on the stock exchanges. SEC suspended trading of 16 companies: The Securities and Exchange Commission suspended trading of 16 companies for their abnormal price hike despite the fact that their fundaments were very poor and many of them were not in commercial operation. In the meantime, some of these companies were de-listed from the stock exchanges. However, to facilitate the trading of the de-listed securities direction has been given by the Commission to CSE to allow transactions of these securities on O-T-C market. SEC Consent Mandatory for Pre-IPO Placement:
The Securities and Exchange Commission has taken measures to ensure compliance of the securities laws for raising capital through pre-IPO placement by issuer companies. SEC Imposed Limitation on Cash Transaction in the Stock Market Deals: To ensure compliance with the Anti Money Laundering Law in the country, the Securities and Exchange Commission has issued a notification restricting cash transaction over Tk. five lacs for purchase or sale of listed companies shares. Transaction of securities exceeding the aforesaid cash limit has to be made through the banking channel by account payee checks, bank payment order or draft or any other mode of transaction available with the banking system. Guidelines for Election/ Appointment of Directors: The Securities and Exchange Commission (SEC) is in the process of finalizing guidelines for election/ appointment of directors and their qualifications with a view to improving corporate governance.
SURVEILLANCE
Inspection: During the period, eleven brokerage houses were inspected by SEC based on some specific observations of surveillance people responsible for monitoring daily securities trading. In this period the Commission requested CSE to investigate into the books and records of three brokerage houses of CSE in respect of transactions of Bank Asia shares and asked DSE to inspect books and records of three brokerage houses of DSE regarding trading of Bata Shoe Company shares, Beach Hatchery Ltd shares and Rahman Chemical shares. In the referred period the Commission decided that the SECs Surveillance Team should conduct regular inspection of books and records of at least one stock broker/dealer of the stock exchanges in each month. Accordingly, the SEC Surveillance team carried out inspection in compliance with the aforesaid decision. The SECs Surveillance team also detected unusual/abnormal trading of Tripti Industries Ltd, at DSE. Based on the recommendation of the Surveillance Team the Commission suspended trading of securities of Tripti Industries Ltd. and constituted an enquiry committee in this respect. During this period the SEC requested DSE to investigate into the securities transactions of Lafarge Surma Cement Ltd. and NCCBL and requested CSE to investigate into securities transactions of Lafarge Surma Cement Ltd. and BCIL. In the referred period, as a part of regular inspection, SECs Surveillance Team visited two brokerage houses of DSE and two brokerage houses of CSE to examine books and records for ensuring proper compliance with the securities laws. Besides, the Commission constituted five enquiry committees to enquire into the transactions of Mercantile Bank Ltd., Mutual Trust Bank Ltd., One Bank Ltd, Uttara Bank Ltd. and Bank Asia Ltd. Surveillance: The Surveillance Department of the Commission monitors on real time basis the trading of securities on Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd. through non-trading version of work stations. Through this system the SEC Surveillance Officers watch the daily trading pattern and time to time inform the top
management of the Commission about the market condition. At the end of the trading period, a report containing abnormal activities, if found during the trading period, is prepared and submitted to the Chairman, Members and other senior officials. Analysis of Trading Data: Surveillance Department of SEC analyzes the post trading data on regular basis. Relevant data and trading information are regularly collected from the exchanges based on which analysis and calculation are done. In this connection historical data analysis of the company is carried out and emphasis is given on the price and volume trend of the securities. If the analysis reveals any abnormal trend or volatility in terms of turnover and price movement, then primary inspection is conducted in order to ascertain the reason(s) behind such movement and if anything suspected wrong, then the matter is placed to higher authority for further action. Special Watch on the Trading of Z Category Shares: The Surveillance Staff of SEC closely monitor the trading of Z category shares, particularly, in respect of price movement of these shares. If any unusual price change in the trading of Z category share is noticed, then the matter is taken up with the higher authority and, if necessary, the concerned brokerage houses are asked to furnish the relevant papers for examination. Supervision and Regulation of Markets and Intermediaries Complaint Statement Period July 2003- June 2004 Against Listed Companies Nature of Complaints Non-payment or delay in payment of declared dividend Non-payment or delay in payment of interest of Debenture Claim of dividend against lost shares Regarding transfer of shares Regarding non refund of IPO deposits Total Against Stock Broker/Dealer Nature of Complaints Regarding non delivery of shares No. 28 Resolved 7 Under process 20 Referred for enforcement action 1 No. 69 16 6 91 Resolved 17 3 3 23 Under process 39 13 3 55 Referred for enforcement action 13 13
Regarding non refund of clients money Total
63 91
6 13
56 76
1 2
Enforcement
The following is the list of enforcement actions taken against stock-dealers, stock-brokers, issuer companies and/or its directors, various institutions and individuals by the Commission during the period of July 2003 June 2004 for reasons appearing against their name:
(C) Issuer Company and/ or Directors of the Issuer Company: Directives/Penalty/Appeal/ Review Sl. No. Name of the Company Nature of default/Appeal Commissions decision 01. Major (Rtd.) Md. Non payment of declared Penalty of Taka 1.50 crore Akhtaruzzaman, dividend of 2001-2002 by imposed on Major (Rtd.) Md. Managing Director, Gachihata Acquaculture Akhtaruzzaman, Managing Gachihata Farms Limited within Director of the Company. Acquaculture Farms stipulated time. Ltd. 02. Mr. Md. Abdur Non payment of declared Penalty of Taka 55.00 lacs Razzak, Managing dividend of 2001-2002 by imposed on Mr. Md. Abdur Director, Raspit Data Raspit Data Management & Razzak, Managing Director of Management & Telecommunication Limited the Company. Telecommunication within stipulated time. Limited 03. Md. Rahmatullah, Appeal against Penalty of Taka one lac Managing Director, Commissions order No. withdrawn. Mr. Md. Apex Tannery Ltd. SEC/Enforcement/158/ Rahmatullah is warned for 2003-75 dated 28 April compliance of all securities 2003 (for non-disclosure of laws in future. Price Sensitive information) imposing Taka one lac penalty on Mr. Md. Rahmatullah, Managing Director of Apex Tannery Ltd.
Sl. No. Name of the Company 04. Mr. Nurunabi, Managing Director, Rupan Oil & Feeds Ltd.
Nature of default/Appeal Non holding of annual general meeting by Rupan Oil & Feeds Ltd.
Commissions decision Penalty of Taka 1.00 lac imposed on Mr. Nurunabi, Managing Director of the Company. An additional penalty of Taka 10,000 per day if default continues after 15 days.
05.
Mr. M. A. Salam, Managing Director Paragon Leather & Footwear Industries Ltd.
Non holding of annual Penalty of Taka 1.00 lac general meeting by Paragon imposed on Mr. M. A. Salam, Leather & Footwear Managing Director of the Industries Ltd. Company. An additional penalty of Taka 10,000 per day if default continues after the date of order.
06.
Mr. Khan Mohammad Iqbal, Chairman & Managing Director Sonali Paper & Board Mills Ltd.
Non holding of annual Penalty of Taka 1.00 lac general meeting by Sonali imposed on Mr. Khan Paper & Board Mills Ltd. Mohammad Iqbal, Chairman & Managing Director of the Company. An additional penalty of Taka 10,000 per day if default continues after the date of order.
07.
Karim Pipe Mills Ltd.
Non holding of annual Penalty of Taka 1.00 lac general meeting by Karim imposed on Mr. Juglul Karim, Pipe Mills Ltd. Director of the Company. An additional penalty of Taka 10,000 per day if default continues after the date of the order.
08.
Mr. Khan Mohammad Iqbal, Chairman & Managing Director of Sonali Paper & Board Mills Ltd.
Appeal against Commissions order dated 22/03/2004 imposing penalty of Taka 1.00 lacs (and also additional penalty of Taka 10,000 per day if default continues after the date of the order) on Mr.
Appeal rejected. The Commission, however, has withdrawn additional penalty of Taka 10,000 per day.
Sl. No. Name of the Company Nature of default/Appeal Commissions decision Khan Mohammad Iqbal, Chairman & Managing Director of Sonali Paper & Board Mills Ltd. for non holding of annual general meeting. 09. A. B. Biscuit Company Limited. Non holding of annual Penalty of Taka 1.00 lac general meeting by A. B. imposed on Mr. Md. Habibur Biscuit Company Limited. Rahman Mia, Chairman of the issuer. An additional penalty of Taka 10,000 per day if default continues after the date of order. (D) Issuer Company and /or Directors of the Company: Warned Sl. Nature of default/Appeal Commissions decision No. 01 Mr. Ekram Ali Violation of Commissions Letter issued with warning to . Mirdha Sponsor Notification No. comply with all securities laws SEC/SRMID/2000in future. Ashraf Textile th 953/313/Admin-06 dated 25 Mills Ltd. March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Mr. Ekram Ali Mirdha, Sponsor of Ashraf Textile Mills Ltd. 02 Ms. Rahat Saleha . Sponsor Ashraf Textile Mills Ltd. Violation of Commissions Letter issued with warning to Notification No. comply with all securities laws SEC/SRMID/2000in future. th 953/313/Admin-06 dated 25 March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Ms. Rahat Saleha, Sponsor of Ashraf Textile Mills Ltd.
03 Ms. Shamsun Nessa Violation of Commissions Letter issued with warning to . Begum, Sponsor Notification No. comply with all securities laws Ashraf Textile Mills SEC/SRMID/2000in future.
Sl. No. Ltd.
Nature of default/Appeal 953/313/Admin-06 dated 25th March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Ms. Shamsun Nessa Begum, Sponsor of Ashraf Textile Mills Limited.
Commissions decision
04 Mr. M. Ataullah . Sponsor Ashraf Textile Mills Ltd.
Violation of Commissions Letter issued with warning to Notification No. comply with all securities laws SEC/SRMID/2000in future. th 953/313/Admin-06 dated 25 March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Mr. M. Ataullah, Sponsor of Ashraf Textile Mills Ltd. Violation of Commissions Letter issued with warning to Notification No. comply with all securities laws SEC/SRMID/2000in future. th 953/313/Admin-06 dated 25 March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Ms. Salima Begum, Sponsor of Ashraf Textile Mills Ltd.
05 Ms. Salima Begum . Sponsor Ashraf Textile Mills Ltd.
06 Mr. Haider Ali Violation of Commissions Letter issued with warning to . Mirdha Notification No. comply with all securities laws Sponsor SEC/SRMID/2000in future. th Ashraf Textile Mills 953/313/Admin-06 dated 25 Ltd. March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Mr. Haider Ali Mirdha, Sponsor of Ashraf Textile Mills Limited. 07 Mr. Asgar Ali Mirdha Violation of Commissions Letter issued with warning to . Sponsor Notification No. comply with all securities laws Ashraf Textile Mills SEC/SRMID/2000in future.
Sl. No. Ltd.
Nature of default/Appeal 953/313/Admin-06 dated 25th March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Mr. Asgar Ali Mirdha, Sponsor of Ashraf Textile Mills Limited.
08 Ms. Rahima Khatun . Sponsor Ashraf Textile Mills Ltd.
Violation of Commissions Letter issued with warning to Notification No. comply with all securities laws SEC/SRMID/2000in future. th 953/313/Admin-06 dated 25 March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Ms. Rahima Khatun, Sponsor of Ashraf Textile Mills Ltd. Violation of Commissions Letter issued with warning to Notification No. comply with all securities laws SEC/SRMID/2000in future. th 953/313/Admin-06 dated 25 March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Ms. Ferdousi Begum, Sponsor of Ashraf Textile Mills Limited. Violation of Commissions Letter issued with warning to Notification No. comply with all securities laws SEC/SRMID/2000in future. th 953/313/Admin-06 dated 25 March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Ms. Rabeya Akhter, Sponsor of Ashraf Textile Mills Ltd.
09 Ms. Ferdousi Begum . Sponsor Ashraf Textile Mills Ltd.
10 Ms. Rabeya Akhter . Sponsor Ashraf Textile Mills Ltd.
11 Ms. Umme Homaira Violation of Commissions Letter issued with warning to . Sponsor Notification No. comply with all securities laws Ashraf Textile Mills SEC/SRMID/2000in future.
Sl. No. Ltd.
Nature of default/Appeal 953/313/Admin-06 dated 25th March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Ms. Umme Homaira, Sponsor of Ashraf Textile Mills Ltd.
12 Mr. Shafiul Alam . Sponsor Ashraf Textile Mills Ltd.
Violation of Commissions Letter issued with warning to Notification No. comply with all securities laws SEC/SRMID/2000in future. th 953/313/Admin-06 dated 25 March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Mr. Shafiul Alam, Sponsor of Ashraf Textile Mills Ltd. Violation of Commissions Letter issued with warning to Notification No. comply with all securities laws SEC/SRMID/2000in future. th 953/313/Admin-06 dated 25 March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Ms. Hamida Begum, Sponsor of Ashraf Textile Mills Ltd. Violation of Commissions Letter issued with warning to Notification No. comply with all securities laws SEC/SRMID/2000in future. th 953/313/Admin-06 dated 25 March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Ms. Sabrina Akhter, Sponsor of Ashraf Textile Mills Ltd.
13 Ms. Hamida Begum . Sponsor Ashraf Textile Mills Ltd.
14 Ms. Sabrina Akhter . Sponsor Ashraf Textile Mills Ltd.
15 Mr. Al-Haj Mohd. Violation of Commissions Letter issued with warning to . Salah Uddin Ahmed, Notification No. comply with all securities laws Sponsor, Ashraf SEC/SRMID/2000in future.
Sl. No. Textile Mills Ltd.
Nature of default/Appeal 953/313/Admin-06 dated 25th March 2001 and gazetted on 16 April 2001 (buy/sell of securities by the Sponsor/Director without prior notification) by Mr. Al-Haj Mohd. Salah Uddin Ahmed, Sponsor of Ashraf Textile Mills Limited.
16 Mr. Siraj Uddin . Haider Director/Sponsor Usmania Glass sheet Factory Ltd.
Violation of Commissions Letter issued with warning to Notification No. SEC/SRMID/ comply with all securities laws 2000-953/313/ Admin-06 dated in future. 25 March 2001 and gazetted on 16 April 2001 (non-submission of written report of buy/sell of share) by Director/Sponsor Mr. Siraj Uddin Haider of Usmania Glass sheet Factory Ltd. Violation of Commissions Letter issued with warning to Notification No. SEC/SRMID/ comply with all securities laws 2000-953/313/ Admin-06 dated in future. 25 March 2001 and gazetted on 16 April 2001 (non-submission of written report of buy/sell of share) by Director/Sponsor Mr. Mohammad Sadek of Usmania Glass sheet Factory Ltd. Violation of Commissions Letter issued with warning to Notification No. SEC/SRMID/ comply with all securities laws 2000-953/313/ Admin-06 dated in future. 25 March 2001 and gazetted on 16 April 2001 (non-submission of written report of buy/sell of share) by Director/Sponsor Mr. M. R. Raskin of Usmania Glass sheet Factory Ltd.
17 Mr. Mohammad . Sadek, Director/Sponsor Usmania Glass sheet Factory Ltd.
18 Mr. M. R. Raskin . Director/Sponsor Usmania Glass sheet Factory Ltd.
(D) Issuer Company: Warned
Sl. Name No. 01 Pubali Bank Ltd. .
Nature of default/Appeal
Sale of bonus share of Letter issued with warning to comply shareholder by Pubali Bank Ltd. with Commissions advise / violating advise of SEC. instructions and securities related laws in future.
02 United Commercial Violation of Commissions order Letter issued with warning to comply . Bank Ltd. No. SEC/Sec-7/99-140 dated 28 with all securities laws in future. April 1999 (non-transfer of lodged share within stipulated time) by United Commercial Bank Ltd. 03 Beach Hatchery Ltd. .. Failure to comply with the condition of the prospectus regarding payment of 15% dividend to the preference shareholders as well as the provision of securities laws regarding payment of dividend by Beach Hatchery Ltd. Letter issued with warning to comply with all securities laws in future.
04. Mona Food Industries Violation of rule 12, Sub-rule Issued warning to comply with all Ltd. (3A), rule 13 of the Securities securities laws in future. and Exchange Rules, 1987 (not submitting financial statement for 2000-2001 and half-yearly financial statements for the halfyear ended 31 December 2001) by Mona Food Industries Ltd. 05 Anwar Galvanizing . Limited Failure to pay the dividend declared by Anwar Galvanizing Limited for the shareholders on March 23, 2003 at 5% within 60 days of declaration in terms of the erstwhile CCIs Notification No. SRO. 385-Law/91 dated 15th December 1991, being the order made under section 2G of the Securities and Exchange Ordinance, 1969. Failure to pay off the dividend declared by Central Insurance Company Limited within 60 Letter issued with warning to comply with all securities laws in future.
06 Central Insurance Company Limited
Letter issued with warning to comply with all securities laws in future.
Sl. Name No.
Nature of default/Appeal days of declaration in terms of the erstwhile CCIs Notification No. SRO. 385-Law/91 dated 15th December 1991, being the order made under section 2G of the Securities and Exchange Ordinance, 1969.
(E) Issuer Company: Directives/Order Issued Sl. No. Name Nature of default/Appeal 01. Bangladesh Non co-operation with SEC Luggage appointed auditor by Industries Ltd. Bangladesh Luggage Industries Ltd. 02.
Commissions decision Directive issued under section 20A of the Securities and Exchange ordinance, 1969 to co-operate immediately with SEC appointed auditor.
M. Hossain Non-payment of audit bill by Directive issued under section 20A of Garments Washing M. Hossain Garments Washing the Securities and Exchange and Dyeing Ltd. and Dyeing Ltd. ordinance, 1969 to pay the audit bill within 7 days and inform the compliance of the directive to the Commission within next working day. M.Hossain Non-rectification of books of Garments Washing accounts of 1998-99 in line and Dyeing Ltd. with audit report submitted by SEC appointed auditor by M. Hossain Garments Washing and Dyeing Ltd. Bangladesh Dyeing & Finishing Industries Ltd. It appears from the Commissions appointed auditors' [auditor appointed by the Commission under rule 12, sub-rule 3, as amended, of the Securities and Exchange Rules, 1987, to re-audit the financial statements of Bangladesh Dyeing & Finishing Industries Ltd. for the year ending on 31 December 2001] report that the Directive issued under section 20A of the Securities and Exchange Ordinance, 1969 to rectify books of accounts of 1998-99 in line with audit report submitted by SEC appointed auditor within next 30 days. Directive issued under section 20A of the Securities and Exchange Ordinance, 1969 to Bangladesh Dyeing and Finishing Industries Ltd., to(a) keep proper books of accounts required as per the Companies Act, 1994; and
03.
04.
Sl. No.
Name
Nature of default/Appeal issuer, among others, failed to keep proper books of accounts as per law, preserve appropriate and documentary evidence in support of transactions etc.
Commissions decision (b) preserve appropriate documentary evidence in support of transactions; (c) make good the loss suffered due to transactions with related companies and also use of companys assets and resources by the related companies; and (d) submit a report to the Commission within 31 December 2003 after compliance with the requirements listed at (a) through (c) above, certified by the auditor appointed by the Commission.
05
Bangladesh Zipper Industries Ltd.
It appears from the Commissions appointed auditors [auditor appointed by the Commission under rule 12, sub-rule 3, as amended, of the Securities and Exchange Rules, 1987, to re-audit the financial statements of Bangladesh Zipper Industries Ltd. for the year ending on 30 June 2001] report, among others, that the issuer - (i) did not maintain proper books of accounts required to reflect its state of affairs and to substantiate its expenditures; (ii) did not produce sufficient and appropriate audit evidence to the auditor for audit; (iii) has suffered huge financial loss due to unexplained bank transactions with its sister concerns and huge quantity of sales to sister concerns etc. Alleged contravention of the condition (a) of the
Directive issued under section 20A of the Securities and Exchange Ordinance, 1969 to the Bangladesh Zipper Industries Ltd., to rectify its books of accounts within 31 December 2003 in the light of the audit report mentioned above and also to make good the loss suffered due to huge inter company transactions, up to the satisfaction of the auditor appointed by the Commission.
06.
The City Bank Limited
Directive issued under section 20A of the Securities and Exchange
Sl. No.
Name
Nature of default/Appeal Commissions Notification No. SEC/SRMI/2000-953/1950 dated 24th October 2000, gazette on 7th November 2000.
Commissions decision Ordinance, 1969 to the managing director, members of the board of directors and management authority related therewith of the City Bank Limited to take appropriate and necessary measures to hold the pending AGM by 31 December 2003.
Corporate Governance Guidelines:

SECURITIES AND EXCHANGE COMMISSION
Jiban Bima Tower 10, Dilkusha (15th, 16th and 20th Floor) Dhaka-1000
NOTIFICATION Dated the 20th February, 2006 No. SEC/CMRRCD/2006-158/Admin/02-08: Whereas, the Securities and Exchange Commission (herein after referred to as the Commission') deems it fit that the consent already accorded by the Commission, or deemed to have been accorded by it, or to be accorded by it in future, to the issue of capital by the companies listed with any stock exchange in Bangladesh, should be subject to certain further conditions, on comply or explain' basis, in order to enhance corporate governance in the interest of investors and the capital market; Now, therefore, in exercise of the power conferred by section 2CC of the Securities and Exchange Ordinance, 1969 (XVII of 1969), the Commission hereby supersedes its earlier Order No. SEC/CMRRCD/2006-158/Admin/02-06 dated the 9th January, 2006 and imposes the following further conditions to the consent already accorded by it, or deemed to have been accorded by it, or to be accorded by it in future, to the issue of capital by the companies listed with any stock exchange in Bangladesh: Provided, however, that these conditions are imposed on comply or explain' basis. The companies listed with any stock exchange in Bangladesh should comply with these conditions or shall explain the reasons for non-compliance in accordance with the condition No.5.
The Conditions: 1.00 1.1. BOARD OF DIRECTORS: Board's Size

The number of the board members of the company should not be less than 5 (five) and more than 20 (twenty): Provided, however, that in the case of banks and non-bank financial institutions, insurance companies and statutory bodies for which separate primary regulators like Bangladesh Bank, Department of Insurance etc. exist, the Board of those companies should be constituted as may be prescribed by such primary regulators in so far as those prescriptions are not inconsistent with the aforesaid condition. back to top
1.2.
Independent Directors
All companies should encourage effective representation of independent directors on their Board of Directors so that the Board, as a group, includes core competencies considered relevant in the context of each company. For this purpose, the companies should comply with the following:(i) At least one tenth (1/10) of the total number of the company's board of directors, subject to a minimum of one, should be independent directors. Explanation: For the purpose of this clause independent director means a director who does not hold any share in the company or who holds less than one percent (1%) shares of the total paid-up shares of the company, who is not connected with the company's promoters or directors or shareholder who holds one percent (1%) or more than one percent (1%) shares of the total paid-up shares of the company on the basis of family relationship; who does not have any other relationship, whether pecuniary or otherwise, with the company or its subsidiary/associated companies, who is not a member, director or officer of any stock exchange, and who is not a shareholder, director or officer of any member of stock exchange or an intermediary of the capital market. (ii) The independent director(s) should be appointed by the elected directors.
1.3.
Chairman of the Board and Chief Executive

The positions of the Chairman of the Board and the Chief Executive Officer of the companies should preferably be filled by different individuals. The Chairman of the company should be elected from among the directors of the company. The Board of Directors should clearly define respective roles and responsibilities of the Chairman and the Chief Executive Officer. back to top
1.4.
The Director's Report to Shareholders
The directors of the companies should include following additional statements in the Directors' Report prepared under section 184 of the Companies Act, 1994:-
(a) The financial statements prepared by the management of the issuer company present fairly its state of affairs, the result of its operations, cash flows and changes in equity. (b) Proper books of account of the issuer company have been maintained. (c) Appropriate accounting policies have been consistently applied in preparation of the financial statements and that the accounting estimates are based on reasonable and prudent judgment. (d) International Accounting Standards, as applicable in Bangladesh, have been followed in preparation of the financial statements and any departure therefrom has been adequately disclosed. (e) The system of internal control is sound in design and has been effectively implemented and monitored. (f) There are no significant doubts upon the issuer company's ability to continue as a going concern. If the issuer company is not considered to be a going concern, the fact along with reasons thereof should be disclosed. (g) Significant deviations from last year in operating results of the issuer company should be highlighted and reasons thereof should be explained. (h) Key operating and financial data of at least preceding three years should be summarised.
(i) If the issuer company has not declared dividend (cash or stock) for the year, the reasons thereof should be given. (j) The number of Board meetings held during the year and attendance by each director should be disclosed. (k) The pattern of shareholding should be reported to disclose the aggregate number of shares (along with name wise details where stated below) held by:(i) Parent/Subsidiary/Associated companies and other related parties (name wise details); (ii) Directors, Chief Executive Officer, Company Secretary, Chief Financial Officer, Head of Internal Audit and their spouses and minor children (name wise details); (iii) Executives; and (iv) Shareholders holding ten percent (10%) or more voting interest in the company (name wise details). Explanation: For the purpose of this clause, the expression executive means top five salaried employees of the company, other than the Directors, Chief Executive Officer, Company
Secretary, Chief Financial Officer and Head of Internal Audit.
back to top
2.00 2.1
CHIEF FINANCIAL OFFICER (CFO), HEAD OF INTERNAL AUDIT, AND COMPANY SECRETARY Appointment
The company should appoint a Chief Financial Officer (CFO), a Head of Internal Audit and a Company Secretary. The Board of Directors should clearly define respective roles, responsibilities and duties of the CFO, the Head of Internal Audit and the Company Secretary.
2.2
Requirement to Attend Board Meetings

The CFO and the Company Secretary of the companies should attend meetings of the Board of Directors, provided that the CFO and/or the Company Secretary should not attend such part of a meeting of the Board of Directors which involves consideration of an agenda item relating to the CFO and/or the Company Secretary.
3.00
AUDIT COMMITTEE:
The company should have an Audit Committee as a sub-committee of the Board of Directors. The Audit Committee should assist the Board of Directors in ensuring that the financial statements reflect true and fair view of the state of affairs of the company and in ensuring a good monitoring system within the business. The Audit Committee shall be responsible to the Board of Directors. The duties of the Audit Committee should be clearly set forth in writing. back to top
3.1
Constitution of Audit Committee

(i) The Audit Committee should be composed of at least 3 (three) members.
(ii) The Board of Directors should appoint members of the Audit Committee who should be directors of the company and should include at least one independent director.
(iii) When the term of service of the Committee members expires or there is any circumstance causing any Committee member to be unable to hold office until expiration of the term of service, thus making the number of the Committee members to be lower than the prescribed number of 3 (three) persons, the Board of Directors should appoint the new Committee member(s) to fill up the vacancy(ies) immediately or not later than 1 (one) month from the date of vacancy(ies) in the Committee to ensure continuity of the performance of work of the Audit Committee.
3.2
Chairman of the Audit Committee

(i) The Board of Directors should select 1 (one) member of the Audit Committee to be Chairman of the Audit Committee. (ii) The Chairman of the audit committee should have a professional qualification or knowledge, understanding and experience in accounting or finance.
3.3 Reporting of the Audit Committee 3.3.1 Reporting to the Board of Directors
(i) The Audit Committee should report on its activities to the Board of Directors. (ii) The Audit Committee should immediately report to the Board of Directors on the following findings, if any:(a) Report on conflicts of interests; (b) Suspected or presumed fraud or irregularity or material defect in the internal control system; (c) Suspected infringement of laws, including securities related laws, rules and regulations; and (d) Any other matter which should be disclosed to the Board of Directors immediately.
3.3.2 Reporting to the Authorities

If the Audit Committee has reported to the Board of Directors about anything which has material impact on the financial condition and results of operation and has discussed with the Board of Directors and the management that any rectification is necessary and if the Audit Committee finds that such rectification has been unreasonably ignored, the Audit Committee should report such finding to the Commission, upon reporting of such matters to the Board of Directors for three times or completion of a period of 9 (nine) months from the date of first reporting to the Board of Directors, whichever is earlier.
back to top
3.4
Reporting to the Shareholders and General Investors

Report on activities carried out by the Audit Committee, including any report made to the Board of Directors under condition 3.3.1 (ii) above during the year, should be signed by the Chairman of the Audit Committee and disclosed in the annual report of the issuer company.
4.00
EXTERNAL / STATUTORY AUDITORS

The issuer company should not engage its external/statutory auditors to perform the following services of the company; namely:(i) Appraisal or valuation services or fairness opinions; (ii) Financial information systems design and implementation; (iii) Book-keeping or other services related to the accounting records or financial statements; (iv) Broker-dealer services; (v) Actuarial services; (vi) Internal audit services; and (vii) Any other service that the Audit Committee determines.
5.00
REPORTING THE COMPLI ANCE IN THE DIRECTOR'S REPORT

The directors of the company shall state, in accordance with the annexure attached, in the directors' report whether the company has complied with these conditions. back to top
Status of compliance with the conditions imposed by the Commission's Notification No. SEC/CMRRCD/2006-158/Admin/02-08 dated 20th February,2006issued under section 2CC of the Securities and Exchange Ordinance, 1969: (Report Under Condition No 5.00) Compliance Status
Condition No Title Explanation for non-compliance with the condition
(Put in the appropriate column)

Complied Not Complied
1.1
1.2 (i) 1.2(ii) 1.3 1.4 (a) 1.4(b) 1.4(c) 1.4(d) 1.4(e) 1.4(f) 1.4(g) 1.4(h) 1.4(i) 1.4(j) 1.4(k) 2.1 2.2 3.0 3.1 (i) 3.1 (ii) 3.1 (iii) 3.2 (i) 3.2 (ii) 3.3.1(i) 3.3.1(ii)(a) 3.3.1(ii)(b) 3.3.1(ii)(c) 3.3.1(ii)(d) 3.3.2 3.4 4.00 (i) 4.00 (ii) 4.00 (iii) 4.00 (iv) 4.00 (v) 4.00 (vi) 4.00 (vii)
Depository
Central Depository Bangladesh Limited(CDBL) was incorporated as a public limited company on August 2000 to operate and maintain the Central Depository System(CDS) of Electronic Book Entry, recording and maintaining securities accounts and registering transfer of securities; changing the ownership without any physical movement or endorsement of certificates and execution of transfer instruments. Securities and Exchange Commission has issued a Certificate to CDBL on December 23, 2003 for starting depository business as a depository. A depository is like a bank for shares instead of money. Instead of holding shares in the form of certificates, investors have accounts in the depository and are able to move securities and settle stock exchange transactions by an electronic update of their accounts. The core service of a depository is the efficient delivery, settlement and transfer of securities through a computerized book entry system. For more details please contact-
Central Depository Bangladesh Ltd BSRS Bhaban(18th Floor) 12 Kawran Bazar, Dhaka-1215, Bangladesh Te: 9138024, 9137405, 9137469, 0171536352, 011804900 Fax: 880-2-8124630 Email: cdbl@bol-online.com Web: http://www.cdbl.com.bd
Brief Investment Guide
Brief Investment Guide for Trading in the Stock Exchanges

What is stock market?
A stock Market is place where stocks (shares) can be bought and sold
What is quoted company
A quoted company is company whose shares are traded on the stock Exchanges
What type of instruments are traded?
The following type of instruments are traded at Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) (a) Equity Shares (b) Debentures (c) Mutual Funds
What is DSE All Share Price Index? How does one read the index?
The DSE All Share Price Index is a market capitalization weighted index comprising all listed companies. Each stock has been given a weight in the index equivalent to its market capitalization. The base was at 100. Daily price change in index securities is captured in the market capitalization figure and reflected in terms of index movement. The index value compares the days market capitalization vis-a-vis base capitalization and indicates how prices in general have moved over a period of time.
How many brokers operate on DSE and CSE?
The Dhaka Stock Exchange (DSE) has 195 SEC registered trading members/brokers and the
Chittagong Stock Exchange (CSE) has 124 registered brokers. Many of these registered brokers have authorized representatives operating on the floor on behalf of the concerned brokers of DSE or CSE. You should execute your deal through a registered broker of a recognized stock exchange or through a registered authorized representative.
How do I deal with a registered authorized representative?
You should send your request in writing for purchase or sale of shares/debentures/mutual funds. The authorized representatives on executing your order furnish you with a purchase/sale note. This purchase/sale note originates from the contract note which is issued by the main broker to the sub-broker. The purchase/sale note would help in resolving any disputes with the authorized representative.
What are the formalities for becoming a client of a broker/authorized
representative?
All investors should open accounts with necessary documentary support of proof of identity and get the registration/account number. The features of this opening an account is to reduce the chances of any disputes.
What is the maximum brokerage that a broker can charge?
The maximum brokerage chargeable is at present 1% of the trade value

What is contract/confirmation note?
Contract note is a confirmation of trades done on a particular day for and on behalf of a client. A contract note issued in the prescribed format and manner establishes a legally enforceable relationship between the member and client in respect of the trades stated in that contract note. Contracts note are made in duplicate and the member and client both keep one copy each.
What are the points to be checked by an investors to check the
validity of a contract note?
Name and address of trading member, their SEC registration number, details of trade like order No. trade No. trade time, security name, quantity rate, brokerage, settlement no, signature of authorized signatory.
What is a Book Closure/Record Date?
The ownership of shares of companies traded on the stock exchange is freely transferable by registration. However, shares are many times held by buyers without sending it for registration to the company. In order to be entitled to the benefits such as dividend, bonus, rights etc. announced by the company , a buyer would need to send it for registration. The company announces cut off dates from time to time. The list of members on the companies registers as of these cut off dates be the people entitled to the corporate benefits.
What is a no-delivery period?
Whenever a book closure or a record date is announced by a company, the stock exchanges sets up a no-delivery period for that security. During this period, trading is permitted in the security. However, these trades are settled only after the no-delivery period is over. This is done to ensure that investor's entitlement for the corporate benefit is clearly determined.
What is an ex-date?
The first day of the no-delivery is the ex-date viz. If there is any corporate benefit such as rights, bonus, dividend etc. announced for which book closure/record date is fixed, the buyer of the shares on or after the ex-date will not be eligible for the benefits.
How do I execute an order on the stock exchanges?
Select the broker you want to trade with opening an account and fulfill the other formalities. Place orders with the broker in writing. Ask for the order
confirmation slip on the day the order is placed. Ask for trade confirmation slip on the day the trade is executed. Ask for contract note at the end of the trade date. Ensure smooth settlement of the trade by delivering securities and funds on time to your broker.
What are the documents you should receive from your broker and
when?
Order confirmation slip. After the order has been placed. Trade confirmation slip. After the trade has been executed. Contract Note: with in 24 hours of the trade being executed.
To what extent price of a share can increase or decrease in a day and
during a settlement?
Standard upward and downward price limits over the previous days market price applicable for each market day:
Previous days per share market price Upto Tk. 200 Tk. 200 to Tk. 500 Tk. 501 to Tk. 1000 Tk. 1001 to Tk. 2000 Tk. 2001 to Tk. 5000 Tk. 5001 and above
Limits 20% but not exceeding Tk. 35 17.5% but not exceeding Tk. 75 15% but not exceeding Tk. 125 12.5% but not exceeding Tk. 200 10% but not exceeding Tk. 375 7.5% but not exceeding Tk. 600
What is settlement cycle?
Settlement cycle on the DSE/CSE is an account period for the securities traded on the exchanges. CLEARING AND SETTLEMENT PROCEDURE
Trading Procedure and Settlement:
Accounting Period Saturday to Monday Tuesday to Thursday
Settlement Day Next Wednesday Next Monday
If I have sold shares when do I deliver them to the broker?
You have to deliver the securities to the broker immediately upon your getting the contract note for sale but in any case before the shares pay-inday.
If I have bought shares when do I pay money to the broker?
If you have bought shares, you have to pay-infunds to the broker in such a manner that the amount paid is realized before the funds pay-inday.
When can I expect to receive funds/securities from the broker?
The securities and the funds are paid out to the broker on the pay-out day.
What should I do if I receive a bad delivery?
All bad deliveries will have to be reported to the clearing house by the buying broker.
What are company objections?
An investors sends the certificate along with the transfer deed to the company for registration. In certain cases the registration is rejected because of signature difference, or if the shares are fake, forged ot stolen or if there's is a court injunction preventing the transfer of the shares etc. In such cases the company returns the shares along with a letter, which is termed as an objection memo. All such cases are identified as company objections.
What is proper transfer deed?
A deed of transfer is considered proper if it is: (a) in the prescribed format (Form 117) (b) dated by the prescribed authority (e.g. Registrar of Comaopnies) and its validity period has not expired (c) duly signed by or on behalf of the transferor and transferee and complete in all receipts.
How does the transfer of shares take place?
After a sale is effected the share certificate along with a proper transfer deed and complete in all respects is sent to the company for transfer in the name of the buyer. A transfer is complete in the books of the company after the transfer is registered in the share transfer register maintained by the company.
What should I ensure while handling over securities which I have
sold?
You have to ensure that the transfer deed is of a recent date and not dated prior to the book closure date. Also, you have to ensure that any other particulars are accurately filled in as contained in the share certificate and if there are any corrections made for the information filled in by the seller, such corrections are properly authenticated by all sellers
Why is it important to register the transfer of shares with the
company?
All the corporate benefits like dividend, bonus, rights etc. announced by the company are given to those persons whose names appear in the register of members of the company as on the book-closure date or record announced by the company. It is therefore important for the buyer to register the ownership of the shares.
What are some of the common investor grievances?
Non-receipt of shares sent to transfer Non-receipt of corporate benefits Non-rectification of bad delivery by the broker Non-receipt of funds/securities on sale/purchase Introduction of fake, forged and stolen securities Nonrectification of company objections Contract notes not issued by the broker
What will you do if you have any of the above grievances?
First you should inform your broker of the matter. See what he suggests. If you are not satisfied put your complaints in writing to the authority of the stock exchanges. If it is not solved. Apply with your grievances to the Securities and Exchange Commission.
Rights and Obligation of an Investors
The right to access: the best price, the speediest service The right to get: Proof of price, proof of brokerage charged, your money on time, your shares on time, shares that are genuine The right for redress: against fraudulent price, against unfair brokerage, against delays of money of shares, against investor unfriendly companies The obligation to be systematic: open a proper account with your broker; have early deal recorded on an enforceable contact note The obligation to be correct: Keep your shares in good condition; Keep your signature verification records up to date The obligation to be timely: make sure you pay on time when you buy; make sure you deliver shares in time when you sell; make sure you pay your broker his brokerage charge in time; make sure to send shares for transfer in your name in time
What safeguards does a shareholder have for his investment?
Apart from the normal risks involved in the ups and downs of the market, a share holder in a
listed company has the protection of a well organized market, the DSE, CSE and the Securities and Exchange Commission (SEC) a statutory body responsible for ensuring an orderly market and protecting the interest of investors, among other things.
Buying in the Primary Market
In order to buy shares issued by a company in the primary market, you will have to fill out a special form, which is obtained from the brokers, the issuing company, or any branch of a commercial bank involved in the particular issue of shares. Photo copies of such forms could also be used. In such a primary issue the minimum number of shares that can be applied for is usually 50, and applications for higher quantities must be for multiple of hundred. Application duly perfected and accompanied by check, bank draft or cash as indicated should be sent to a branch of a bank engaged for the purpose or to a share broking company or the company issuing the shares as stated in the prospectus In the case of the issue of new shares which have a high demand, it is possible that the amount of money the company is seeking from the issue would be found or subscribed fully, before the closing date. Therefore, it is usually advisable to apply for shares in a primary issue within the stipulated times of the prospectus. If the issue is over-subscribed the applicant will in due course receive a refund of the money paid for not getting shares through lottery. I f your application is accepted and shares are allotted in your name you will be issued a share certificate by the company. However, you will not be permitted to withdraw your investment from the company. This is because share investment as equities have no maturity dates as with debt obligations. The company in which you have purchased shares has not incurred a debt obligation by issuing shares. Further the Companies Act prohibits a company buying back its own shares. You will in time earn a dividend, when the company declares dividends depending on its profitability. Or else you may be allotted bonus shares or entitled to buy more shares on a rights issue. However, if you wish to covert your shares into cash you can sell in the Stock Exchanges.
About SEC Securities Laws Press Release Investor Information Stock Exchanges
Annual Report Quarterly Report Companies Home
INVESTOR COMPLAINT
FORMAT FOR INVESTOR COMPLAINT AGAINST SECURITY ISSUER (Use separate form for each company/complaint) (Please tick (? ) the appropriate item and complete all columns in capital letters)
To Securities & Exchange Commission (Complaint Desk) Jiban Bima Tower (15th & 16th Floor) 10, Dilkusha C/A Dhaka-1000
FOR SEC USE ONLY Acknowledgement Case File Ref. No. No. Ref. No. Date
Status
Dear Sirs Please take up the matter with the company for immediate redressal of my complaint particulars of which are as under: A. Name & Address with phone No. of the Investor: B. Folio No: C. Name & Address of the Company complained against: D. Name of the Registrar/Transfer Agent (if any) : E. SEC acknowledgement Reference No. : (In case of reminder) F. Nature of complaint Type / Category: :
(i) Issue/ Offer -------------------- non-receipt of : (a) Refund Warrant/ Allotment Advice (b) Revalidation of Refund Warrant (RW) (c ) Duplicate RW for correct amount (d) Duplicate RW after Indemnity (against lost RW) (e) Duplicate RW on correct bank (give details) (f) Short Refund (g) Others (specify) (ii) Dividend-----------------------non receipt of (a) Final ( at % of the FY (b) Interim (at % of the FY ) (iii) Shares ----------------------- non receipt of certificates in/after: (a) Allotment letter/Exchange of AL (b) Conversion (c ) Splitting (d) Transfer (e) Endorsement (f) Bonus (at % of the FY ) (g) Transmission (h) Consolidation (i) Duplicate on submission of Indemnity Bond (iv) Debenture/Bond -------------------------- non-receipt of: (a) Interest (b)Transfer (c) Consolidation certificate (d) Conversion certificate (e) Redemption Amount (f) Transmission (g) Splitting certificate (h) Delay in payment of interest/ redemption amount (i) Exchange of allotment letter (j) Endorsement (k) Duplicate on submission of indemnity bond (v) Miscellaneous --------------------------------- non-receipt of: (a) Annual Report (b) Interest on delayed refund payment (c) Brokerage/Commission payment (d) Offer for Rights (e) Registration of change in address (f) Half yearly account (g) Any other (specify) G. Particulars of the application/security held (a) No. of security applied for/held (b) Kind of security :
(i) Share (ii) Debenture (iii) Others (c) Mode of payment (details) : (i) Cash (ii) Cheque/ D. D/P.O : No. ___ Dated ______Amount Tk._____: Drawn on ________ (d) Application deposited at :
(e) Bank serial No. : (f) Photocopy of Bank Certificate enclosed (i) Yes (ii) No (g) Photocopy of acknowledgement slip enclosed : (i) Yes (ii) No (h) Original Refund Warrant No. : (in case of revalidation/duplicate) (i) Period on/for which dividend/interest/ maturity amount/redemption amount due (j) Date on which security was forwarded to the Company/Registrar/Transfer Agent (k) Indemnity Bond sent for issue of duplicate : (I) Yes, Date:______________ (ii) No. H. Other details, if any, in brief I. Dates of earlier correspondence with the Company/ Registrar/Transfer Agent J. Enclosure, if any (specify)
Place of the security holder
Date
Signature
NOTE: It would be advisable to address the complaint to SEC only if the Company / Registrar/Transfer Agent has not responded inspite of having sent two reminders over a period of at least one month.
Securities and Exchange Commission Dhaka ACKNOWLEDGEMENT
Received the complaint reference No.___________________ dated______________________ for examination and necessary action (if applicable). Official seal Signature & date
About SEC Securities Laws Press Release Investor Information Stock Exchanges Annual Report Quarterly Report Companies Home
Forgery of shares or securities or sale or purchase of, or transaction in. forged shares
or securities is a heinous, criminal offence. It causes serious damage or loss to the innocent investors and creates crisis in the capital market. Under section 467 of the Penal Code, the maximum punishment for a person involved in such offences is imprisonment for life. Under section 471 of the Penal Code whoever fraudulently or dishonestly uses as genuine any share or security which he knows or has reasons to believe to be forged shall be punishable in the same manner as if he fad forged such share or security. It is a solemn duty of every conscious citizen of the country to refrain from duplication or forgery of shares or securities or sale or purchase of, or transaction in, forged shares or securities, and to inform about persons involved in such heinous activities. Please supply to the following address any information on forged or false shares or securities.
CAUTION NOTICE REGARDING FAKE SHARES

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the securities market. Conducting research and publishing information.

Capital Market Regulatory Reforms & Compliance:

Capital Issue (Initial Public Offering has been renamed):

Management Information Systems:

Registration & Licensing:

Research & Development:

Supervision & Regulation of Markets and Intermediaries:

ADB Project Mr. Md. Anwarul Kabir Bhuiyan, Executive Director

On Education Leave Mr. ATM Tariquzzaman, Executive Director

No. SEC/Chairman-6/42/95/644 2006

``11. Chairman, Bangladesh Leasing and Finance Companies Association.

By order of the Commission

Md. Saifur Rahman Director (Administration)

No. SEC/Chairman-6/42/95/529 2006

iii. To advise on any other matter as may be referred to by SEC.

Bangladesh Capital Market The Commission:

46,055.00 788.61 30.83

49,532.91 832.49 7.55

70,313.00 1,062.77 41.95

118437 1711.52 68.44

897,587.00 1,671.01 236.94 58.4

224,923.00 3,761.25 130.83 59.8

233,075.1 2 3,522.90 3.62 66.16

323367.94 4672.95 38.74 69.2

612.74 19,152.27 327.95 (45.25) 2.14 66.97 1.15 (48.89)

681.38 53,181.71 902.92 177.68 2.55 198.44 3.32 196.33

883.3 64,835.28 979.98 21.91 3.42 251.38 3.8 26.64

797.77 65079.11 1099.3 0.38 3.5 285.43 4.82 13.58

Performance of DSE at a glance The Chittagong Stock Exchange (CSE):

Regarding non refund of clients money Total

Karim Pipe Mills Ltd.

Sl. No. Ltd.

04 Mr. M. Ataullah . Sponsor Ashraf Textile Mills Ltd.

05 Ms. Salima Begum . Sponsor Ashraf Textile Mills Ltd.

Sl. No. Ltd.

08 Ms. Rahima Khatun . Sponsor Ashraf Textile Mills Ltd.

09 Ms. Ferdousi Begum . Sponsor Ashraf Textile Mills Ltd.

10 Ms. Rabeya Akhter . Sponsor Ashraf Textile Mills Ltd.

Sl. No. Ltd.

12 Mr. Shafiul Alam . Sponsor Ashraf Textile Mills Ltd.

13 Ms. Hamida Begum . Sponsor Ashraf Textile Mills Ltd.

14 Ms. Sabrina Akhter . Sponsor Ashraf Textile Mills Ltd.

Sl. No. Textile Mills Ltd.

17 Mr. Mohammad . Sadek, Director/Sponsor Usmania Glass sheet Factory Ltd.

18 Mr. M. R. Raskin . Director/Sponsor Usmania Glass sheet Factory Ltd.

(D) Issuer Company: Warned

Sl. Name No. 01 Pubali Bank Ltd. .

06 Central Insurance Company Limited

Sl. Name No.

Bangladesh Zipper Industries Ltd.

The City Bank Limited

Directive issued under section 20A of the Securities and Exchange

Corporate Governance Guidelines:

The Conditions: 1.00 1.1. BOARD OF DIRECTORS: Board's Size

Chairman of the Board and Chief Executive

The Director's Report to Shareholders

Secretary, Chief Financial Officer and Head of Internal Audit.

Requirement to Attend Board Meetings

Constitution of Audit Committee

Chairman of the Audit Committee

3.3.2 Reporting to the Authorities