Download Trading of Securities on the Stock Exchange

Presentation
on
Regulatory Framework of Capital Market
Prepared by
Mohammad Abul Hasan
Director
Bangladesh Securities and Exchange Commission
Disclaimer
Views expressed in the presentation
belongs to presenter and do not
necessarily reflects the views of the
Commission
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Purpose of this awareness Program
I)
II)
III)
To provide an idea of financial market;
To provide an idea of regulatory
framework
of
capital
market
in
Bangladesh;
To provide an outline of securities related
laws, rules & regulations in Bangladesh
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Some Concept
Financial Market:
Financial Market refers to a conceptual
“mechanism” rather than a physical
location. It refers to the mechanism by
which borrowers and lenders get together.
Financial Market
Money Market
Capital Market
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Financial Market Diagram
Financial System
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Some Concept (continue)

Money Market
The financial markets in which funds are borrowed or
loaned for short periods where securities with maturity
of one year or less are traded. Money markets
securities are treasury bills, bankers acceptances,
commercial paper, negotiable certificates of deposits
etc.

Capital Market
The financial markets in which funds are raised by the
issuer for long term periods where securities with
maturity of more than one year are traded. Capital
markets securities are common/preferred share,
debenture, bonds etc.
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Some Concept (continue)
Two Segment of Capital Market
Capital
Market
Primary
Market
Private
Placement
Secondary
Market
Public
Offering
Organized
Unorganized
Section
Section
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Some Concept (continue)
Primary Market
Primary markets are the markets in which issuers raise
funds by issuing new securities.
Secondary Market
Secondary Markets are markets in which existing,
previously issued securities are traded among investors.
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Division of Capital Market
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Organized Section Diagram
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Regulatory Framework of Capital Market
Framework means structure giving shape
and support. Some legal structure and
institutional structure is essential to run,
regulate and control of a capital market
which is called capital market regulatory
framework.
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Regulatory Framework of Capital Market
Division of Regulatory Framework
Legal Framework
Institutional Framework
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Regulatory Framework of Capital Market
Act/Ordinance
CDBL
Rules/Rgulation
of BSEC
DSE
BSEC
CSE
Order/Directive/
Condition of
BSEC
Regulation/Bylaw
of SRO
OTC
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Legal Framework of Capital Market
Law passed by the Parliament/Ordinance issued by the President
Rule/Regulation issued by the Commission
Order/Direction/Condition imposed by the BSEC
Regulation/By Laws issued By the SROs
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Legal Framework of Capital Market
(Contd.)
Basic Act & Ordinance
The basic acts & ordinance that cover the capital
market are:
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Securities and Exchange Ordinance, 1969
Bangladesh Securities and Exchange Commission Act,
1993
Depository act, 1999
Exchanges Demutualization Act, 2013
Legal Framework of Capital Market
(Contd.)
The relevant acts that cover the capital market
are:
Companies Act, 1994
Trust Act, 1882
Insurance Act, 1938
Bank Company Act, 1991
Financial Institutions Act, 1993
Money Laundering Prevention Act, 2012
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Legal Framework of Capital Market (Contd.)
Rules/Regulation Framed By the Commission
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Insiders Trading Prohibition Rules, 1995
Merchant Banker & Portfolio Manager Rules,1996
Credit Rating Companies Rules,1996
Margin Rules, 1999
Stock Dealer, Stock Broker & AR Rules, 2000
Market Maker Rules, 2000
Issue of Capital Rules, 2001
Over-the- Counter Rules, 2001
Mutual Fund Rules, 2001
Merger & Acquisition Rules, 2002
Security Custodial Services Rules, 2003
Issue of Asset Backed Securities Rules, 2004
Public Issue Rules, 2015
Right Issue Rules, 2006
Securities and Exchange Rules, 1987(Framed by Govt. Before Establishment of SEC)
Depository Regulations, 2000
(Issued under Depository Act 1999)
Depository (Users) Regulations, 2003 (Issued under Depository Act 1999)
Research Analysis Rules, 2013
Private Placement of Debt Securities Rules, 2012
Alternative Investment Rules, 2015
Development of Investment Education and Training Rules, 2016
Qualified Investor Offer by Small Capital Companies Rules, 2016
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Rules/Regulation Framed by the Commission
Depository Regulations, 2000
Securities and Exchange Rules’1987
Public Issue Rules, 2006
Depository (Users) Regulations, 2003
Right Issue Rules, 2006
Insiders Trading Prohibition Rules,
1995
Issue of ABS Rules, 2004
Security Custodial Services Rules,
2003
Research Ananlysis Rules,2013
Merger & Acquisition Rules, 2002
Private placement of Debt securities
Rules, 2012
M.Banker & Portfolio Manager
Rules,1996
Credit Rating Companies Rules,1996
Margin Rules, 1999
Stock Dealer Stock Broker & AR
Rules, 2000
Mutual Fund Rules, 2001
Over-the- Counter Rules, 2001
Issue of Capital Rules, 2001
Market Maker Rules, 2000
Legal Framework of Capital Market
(Contd.)
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Regulations Framed By Exchanges (SRO)
Stock Exchange (Listing) Regulations, 2015
Stock Exchange (Settlement of Transactions) Regulations,2013
Stock Exchange (Settlement Guarantee Fund) Regulations,2013
Automated Trading Regulations, 1999
Short Sales Regulations, 2006
Investors Protection Funds Regulation
Internet Trading Regulations
Stock Exchange (Board & Administration) Regulations, 2013
Stock Exchange (Trading Right Entitlement Certificate) Regulations, 2013
Stock Exchange Bye Laws
CDBL Bye Laws
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Institutional Framework of Capital Market
Bangladesh Securities and Exchange Commission
Stock Exchanges
CDBL
Over the Counter
(OTC)
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Institutional Framework of Capital
Market (Contd.)
Bangladesh Securities and Exchange
Commission
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Established in 1993 under BSEC Act, 1993
Prime Regulator of Securities Market
Administers Securities Laws
Have Executive & Quasi Judicial Authority
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Institutional Framework of Capital Market
(Contd.)
Mission of the Commission
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Proper issuances of securities
Protection of the interest of the investors in
Securities
Regulation of Securities market
Development of Securities market
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Departments of the commission
Commission
Commission
Secretariat
Admin &
Finance
IAD
Surveillance
Capital Issue
SRI
SRMIC
Registration
MF & SPV
R&D
MIS
CDS
Off.. CA
Finamcial
Literacy
LAW
Enforcement
CFD
Internal Audit
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THANK
YOU
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