1. Presentation on Regulatory Framework of Capital Market
Prepared by
Mohammad Abul Hasan
Director
Bangladesh Securities and Exchange Commission

2. Disclaimer
Views expressed in the presentation belongs to presenter and do not necessarily reflects the views of the Commission

3. Purpose of this awareness Program
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

4. Financial Market: Some Concept
Financial Market refers to a conceptual “mechanism” rather than a physical location. It refers to the mechanism by which borrowers and lenders get together.

5. Financial Market Diagram
Financial System

6. 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.

7. Some Concept (continue)
Two Segment of Capital Market
Capital Market
Primary Market
Private Placement
Public Offering
Secondary Market
Section
Organized
Unorganized

8. 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.

9. Division of Capital Market

10. Organized Section Diagram

11. 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.

12. Regulatory Framework of Capital Market

13. Regulatory Framework of Capital Market
BSEC
CDBL
CSE
OTC
DSE
Act/Ordinance
Rules/Rgulation of BSEC
Condition of BSEC
Order/Directive/
Regulation/Bylaw of SRO

14. Legal Framework of Capital Market

15. Legal Framework of Capital Market (Contd.)
Basic Act & Ordinance
The basic acts & ordinance that cover the capital market are:
Securities and Exchange Ordinance, 1969
Bangladesh Securities and Exchange Commission Act, 1993
Depository act, 1999
Exchanges Demutualization Act, 2013

16. 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

17. Legal Framework of Capital Market (Contd.)
Rules/Regulation Framed By the Commission
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, (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

18. Rules/Regulation Framed by the Commission

19. Legal Framework of Capital Market (Contd.)
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

20. Institutional Framework of Capital Market

21. Institutional Framework of Capital Market (Contd.)
Bangladesh Securities and Exchange Commission
Established in 1993 under BSEC Act, 1993
Prime Regulator of Securities Market
Administers Securities Laws
Have Executive & Quasi Judicial Authority

22. Institutional Framework of Capital Market (Contd.)
Mission of the Commission
Proper issuances of securities
Protection of the interest of the investors in Securities
Regulation of Securities market
Development of Securities market

23. Departments of the 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

24. THANK YOU