APPROVAL OF SETTLEMENT OF STOCK EXCHANGE TRANSACTIONS REGULATIONS, 1997

The Commission has approved the Settlement of Stock Exchange Transactions Regulations, 1997 proposed by DSE and CSE vide Notification Nos. DSE and CSE, both dated 15th September 1997. In terms of Regulations, transactions carried out during Saturday to Monday shall be settled on a net basis on the next Wednesday; whereas those during Tuesday to Thursday on the succeeding Monday. The members shall be responsible for settlement to their clients within one day of their receipt of securities and/or cheque from the Clearing House of DSE/CSE. The Regulations prohibited sort-selling of any securities; and carry forward of any transactions beyond the related settlement date; and also made buying-in selling-out of securities automatic on the day next to the settlement date on the risk and account of the defaulting members.

EXEMPTION OF PUBLIC COMPANIES FROM OBTAINING SEC’S SANCTION FOR CAPITAL UPTO TAKA 10.0 CRORE

The Commission by issuing order no. SEC/Section-7/Cap. Sanction/97-127 dated 16th September 1997 exempted all public companies from obtaining SEC’s sanction of capital up to Tk. 10 crore. All private companies would continue to enjoy the exemption benefit irrespective of the amount of their capital.

THREE YEARS LOCK-IN ON SPONSORS/PROMOTERS/DIRECTORS

The Commission by Notification no. SEC/Section-7/Lock-in/97-128 dated 16th September 1997 introduced lock-in on Sponsors/Promoters/Directors as described in the Prospectus for three years from the date of approval of prospectus by the Commission or from the start of commercial operation, whichever is later.

SPECIAL AUDIT BY SEC’S EMPANELLED AUDITORS

The Commission by Notification no SEC/Section-7/IPO/97-129 dated 16th September 1997 imposed a condition that if directed by the Commission, a public company making IPO shall carry out a special audit of its latest financial statements by an auditor out of SEC’s Panel of Auditors. Such an auditor shall submit a due diligence certificate and a separate confidential report directly to the Commission.

REVISION OF PUBLIC ISSUE QUOTAS 

The commission by issuing Notification no. SEC/Section-7/130 dated 28th September 1997 revised public issue quotas. Quota for non-resident Bangladeshis has been re-fixed at 10%; whereas 63% and 27% have been reserved for Minimum Market Lot and other Lot applicants respectively. Quotas for Foreign Investors, ICB Unit/Mutual Funds, Employees and Local Institutional Investors have been abolished.

TIME-STAMPING OF WRITTEN ORDERS MADE OBLIGATORY

The Commission by amending rules 4(1) and (5) of the Securities and Exchange Rules, 1987 made time-stamping of written orders obligatory for any members of DSE and CSE vide Notification no. SEC/Section-7/SER/02 dated 30th September 1997. This amendment also requires the members of DSE and CSE to furnish copy of Howlas/Contract Notes to their client along-with confirmation notes/bills.

THE JATIYO SANGSAD PASSED SECURITIES AND EXCHANGE COMMISSION ACT (Second Amendment) BILL, 1997

The Jatiyo Sangsad passed Securities and Exchange Commission (Second Amendment) Act, 1997 with the objective of enabling the Commission to perform its responsibilities smoothly and quickly.

The bill proposed the appointment of four full-time Members in the SEC instead of existing two.

The Bill also proposed amendment to the law which relates to the holding of a Quorum. The Quorum will hereafter comprise of the Chairman and two full-time Members.

ELEMINATION OF DOUBLE TAXATION ON INCOME FROM MUTUAL FUNDS

Ministry of finance has given approval to the proposal for eliminating double taxation on income from regular operation of Mutual Fund as proposed by the national board of Revenue. 

TIME LIMIT REFIXED FOR TRANSFER OF SHARE

The Commission has re-fixed time frame for transfer of shares by listed companies vide SEC’s Notification No. SEC/Sec-7/98-15.51 dated 22nd January 1998.

SEC MADE DISCLOSURE MANDATORY ON TRANSFER OF 5% OR ABOVE SHARE HOLDINGS OF ALL LISTED COMPANIES
 

The SEC directs all companies listed in the Stock Exchange(s) to submit a report on each director, officer and/or other shareholder of the company who is or had been the beneficial owner of any class of the company’s listed equity securities of five percent (5%) or above at any point of time within seventh day of every month of the English Calendar year in the prescribed format vide Notification No. SEC/Section-7/98-135 dated 26th January, 1998.

SUBMISSION OF REPORTS ON EVERY TRANSFER OF SHARES BY THE SPONSORS OF ALL LISTED COMPANIES.

The Securities and Exchange Commission directs all companies listed in the Stock Exchange(s) to submit to the Commission a Report in case of every transfer of share by the company’s sponsors within seven days of transfer in the prescribed format vide Notification No. SEC/Section-7/98-136 dated 26th January 1998.

MANDATORY TO PREPARE FINANCIAL STATEMENTS AS PER ISA, IAS STANDARD

The Securities and Exchange Commission by Notification No. SEC/Section-7/SER/03/132 dated 22nd October, 1997 amended Securities and Exchange Rules, 1987 prescribing the formats for auditors report vis-à-vis requiring the listed companies to prepare financial statements of an issuer of a listed security shall be prepared in accordance with the requirements laid down in the schedule and the International Accounting Standards as adopted by the Institute of Chartered Accounts of Bangladesh and shall be Audited by a Chartered Accountant in practice within the meaning of the Bangladesh Chartered Accountants Order, 1973 (P.O.2 of 1973) in accordance with the International Standards of Auditing as adopted by the Institute of Chartered Accountants of Bangladesh and the report of the auditors shall be in Form ‘B’ annexed to the schedule.

COMMISSION INTRODUCED GUIDELINES FOR REGULATING THE SHARE PRICE MOVEMENT IN THE STOCK EXCHANGE TRADING

The Securities and Exchange Commission in order to protect in interest of the investors withdrew flat rate system of circuit breaker and directed, under section 34-(4) of the Securities and Exchange Ordinance, 1969 that the Dhaka & Chittagong Stock Exchanges amend their trading related rules and regulations for regulating the share price movements in the Stock Exchanges vide Notification No. SEC/Section-7(Law)/96-01/258 & 259 accordingly.

INVESTMENT IN IPO

As per Government decision “Investments in IPO will not be questioned about source”.

COURT CASE(S)

A. SHARE SCAME CASES (15 COMPLAINT CASES)

The Hon’ble Appellate Division has rejected the leave petition filed by the three accused (Beximco Pharmaceuticals Ltd., Shinepukur Holdings Ltd., and Doha Securities Ltd.) on 13th May 1998
The trial of all the cases (15 cases) will start in the court of Session Judge.

B. CASE FILED AGAINST ADVANCE CHEMICAL INDUSTRIES LIMITED (ACI)

The Securities and Exchange Commission has filed two Criminal Cases against Consolidated Chemicals Limited and Ms. Seema Haque, Company Secretary of ACI at the Chief Metropolitan Magistrate Court (CMM), Dhaka on 9th June 1998 bearing complaint petition case No. 2064/98 and 2065/98. The Learned Metropolitan Magistrate instead of taking cognizance kept the aforesaid cases pending till the finalization of ad-interim injunction matter passed by 6th Assistant Judge, Dhaka in Title Suit No. 183/98 dated 8th June 1998. The complaint cases may be taken up again after vacating of the aforesaid ad-interim injunction matter. 

C. SUIT AGAINST ORION INFUSION

The Securities and Exchange Commission has filed Certificate Case to the Certificate Officer, District Dhaka against Orion Infusion Limited and 7 of its Director for the realization of fine amounting to Taka 19.20 Lakh plus Taka 10,000/- for each day of default till compliance on 23rd June 1998.

This penalty was imposed by the Securities and Exchange Commission in exercise of its power under section 22 of the Securities and Exchange Ordinance, 1969. The Orion Infusion Limited failed to pay the declared dividend for the 1994-95 and 95-96 financial year within 60 days from the date of its declaration. 
The Securities and Exchange Commission after hearing the certificate debtor imposed fine of Taka 1,00,000/- and directed the company to pay dividend within certain date and failing which Taka 10,000/- as fine will be attracted for each day of default. The Commission realized Taka 1.0 lac and has filed this Certificate Case for realization of Taka  19,20,000/- as fine till date for the daily default.