1|Page

A report on

Bangladesh Securities and Exchange Commission (BSEC)

2|Page

Presented To
Trisha Saha
Lecturer
Department of Management Information Systems
Noakhali Science and Technology University

Presented By
Team Rangers(Group-3)
Name ID
Hasib Al Amin ASH1822018M
Nur Islam ASH1822014M
Aminul Islam ASH1822003M
Avijit Saha ASH1822049M
Tamanna Tun Nur BKH1822044F
3|Page

ABSTRACT
The paper tries to give information about Bangladesh Securities and Exchange Commission
(BSEC): their present condition, future prospects and challenges. Capital market is the source
of long-term financing for the business and industries, way of mobilizing savings to
investment, and provider of price discovery and liquidity generation through organized stock
exchanges. While the primary market directly provides financing to the business and
industries, the secondary market keeps continuation of price discovery and liquidity
generation for the investors keeping the whole system active. But investors should take
investment decision based on proper knowledge, judgment and risk tolerance. Bangladesh
Securities and Exchange Commission is continuing its efforts to develop a more enabled
capital market in Bangladesh where investors, businesses and industries, government and all
market participants may find it more worthy, and can contribute more significantly to the
development of our national economy. We hope all concerned will play their due role
towards developing a more vibrant capital market in Bangladesh in the years to come.
4|Page

Table of contents
SL No. Topics Page No.

01 Introduction 05

02 Address of SEC 05

03 Securities and Exchange Commission 06

04 Objectives of SEC 06

05 Vision, Mission and strategy 07

06 Initially concerned of SECB 07

07 Organizational Chart 08

08 Functions 09

09 Background of Dhaka Stock Exchange 10

10 SECB Division 10

11 Over-the-Counter (OTC) 11

12 Management of SEC 11

13 Problems and Limitations of SEC 12

14 Conclusion 12

15 Reference 12
5|Page

Introduction
 The Bangladesh Securities and Exchange Commission (BSEC)
was established on 8th June, 1993 as the regulator of the
country’s capital market through enactment of the Securities and
Exchange Commission Act 1993. Through an amendment of
the Securities and Exchange Commission Act, 1993, on
December 10, 2012, its name has been changed as Bangladesh
Securities and Exchange Commission from previous Securities
and Exchange Commission. The Commission consists of a
Chairman and four Commissioners who are appointed for
fulltime by the government for a period of four years and their
appointment can be renewed only for further one term, subject
to age limit 65. The Chairman acts as the Chief Executive of the
Commission. The Commission has overall responsibility to
formulate securities legislation and to regulate the market
accordingly. The Commission is a statutory body and attached
to the Ministry of Finance.

Address of SEC
Bangladesh Securities and Exchange Commission
Securities Commission Bhaban
E-6/C Agargaon Sher-e-Bangla Nagar Administrative Area Dhaka-
1207,
Bangladesh
6|Page

Securities and Exchange Commission

Securities and Exchange Commission (SEC) is the supreme authority
of capital market in Bangladesh. SEC was established on 8 June 1993.
It is formed and regulated by the Securities and Exchange
Commission Act. 1993. SEC is under finance ministry of the people’s
Republic of Bangladesh. SEC is a statutory organization. The main
objective of SEC is to protect the investors. It regulates the capital
market by formulating rules.
On 14 November 1993 SEC started functioning. SEC is the
authoritative controller of stock exchanges in Bangladesh. If any
company wants to issue shares in the stock market it has to take
permission from SEC.
SEC is responsible for improving capital market by developing
facilities for both investors and companies and ensuring the efficient
and effective management of the capital market.
So, SEC virtually controls the capital firm households to corporate
bodies thereby helping industrialization and creating employment.

Objectives of SEC
SEC is the authority to regulate and control the capital market in
Bangladesh. It’s a statutory organization. They are the essential
objectives of SEC as follows:
To monitor, investigate and control the capital market,
To ensure development and evolution of share market,
To regulate the share or debenture issue.
To provide a convenient environment for both investors and
companies.
To observe and ensure the rules and regulations those are
followed in transactions.
To formulate policies for the capital market.
To establish a new stock exchange.
To protect frauds and other misdeeds.
7|Page

Vision, Mission and strategy

VISION is the development of modern and efficient corporate
sector and capital market, based on sound regulatory principles.

MISSION is to develop a fair, efficient and transparent regulatory

framework, based on international legal standards and best
practices

STRATEGY is to develop an efficient and dynamic regulatory

body , ensures proper risk management procedures in the capital
market, and protects investors through responsive policy measures
and effective enforcement practices.

Initially concerned of SECB

It was initially concerned with the regulation of corporate sector
and capital market.

Over time, its mandate has expanded to include supervision and

regulation of
insurance companies, non-banking finance companies private
pensions.
8|Page
9|Page

Functions
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.

10 | P a g e

Background of Dhaka Stock Exchange

East Pakistan Stock Exchange Ltd was finally named as Dhaka Stock
Exchange (DSE) on 14 May 1964.
Although incorporated in 1954, formal trading started in 1956.
Prior to independence in 1971, the number of listed companies in
DSE was 196 with a total paid up capital of Tk. 4 billion.
The total number of listed securities is now 600

SECB Division
The SECP is divided into the following four divisions:
1.Law Division Objective: Growth of enterprise, protection of
investors and creditors, promotion of investment and development
of economy Law division divided into three departments:
Registration Enforcement Management Department Department
Team
2. Securities Market Division u Objective: Protection of
investors, regulation of markets dealings in securities It has two
department: Market Supervision and Capital Issues Department.
Policy, Regulation and Development Department.
3.Specialized Companies Division Objective: u To provide a
regulatory environment for the development and promotion of a
Non-Bank Financial (NBF) sector. u . Protect the interests of
shareholders, depositors and policyholders under the relevant laws.
4. Insurance Division. u The main objectives includes: u Regulates
and monitors the Insurance Sector through u Insurance Ordinance,
2000 and the Companies Ordinance, 1984

Over-the-Counter (OTC)
Over-the-Counter (OTC) means the facilities provided by an
exchange for the purpose of buying or selling of unlisted or
11 | P a g e

delisted securities from the stock exchanges. The OTC Market

provides an alternative to stock exchange listing for securities of
issuers that either choose not to be listed on Dhaka Stock Exchange
or not to meet the relevant listing requirements. The term “OTC
Securities” is a catch –all phrases for any security that is not listed
on stock exchange Dhaka Stock Exchange Ltd. provides Over-The-
Counter (OTC) facilities for transaction of share of companies as
per SEC’s directive no. SEC/CMRRCD/2001-16 dated 06
September, 2009 transaction procedure of which is followed by
Securities and Exchange Commission (Over-the-Counter) Rules,
2001. OTC Market

Management of SEC
Risk management Market risk defines the overall risk
involved in the capital market investments. The stock market
rises and falls depending on a number of issues. The
collective view of the investors to invest in a particular stock
or bond plays a significant role in the stock market rise and
fall. Even if the company is going through a bad phase, the
stock price may go up due to a rising stock market.
Management of Capital Market.
Asset management. Asset Management is the business of
providing financial products or services to a customer for a
fee or commission. National banks and federal savings banks
(banks) engaged in asset management activities are exposed
to many risk factors and must effectively identify, measure,
control, and monitor risks. Management of Capital Market
Portfolio management. Prudent investing is a rational
process. It involves deciding how much risk to take, then
choosing asset classes to match an investor's preferred risk-
return tradeoff. We manage a broad range of strategies to
meet the needs of investors with diverse investment goals.
12 | P a g e

Problems and Limitations of SEC

Price Manipulation It has been observed that the share values of
some profitable companies have been increased fictitiously some
times that hampers the smooth operation of DSE.
Delays of settlement Financing procedures and delivery of
securities sometimes take an unusual long time for which the
money is blocked for nothing.
Irregular payment dividends Some companies do not hold Annual
General Meeting and eventually declare dividends that do not
reflect the real or actual financial positions of the company and
ultimately shareholders become confused.

Conclusion
• Capital market is the source of long-term financing for the
business and industries, way of mobilizing savings to
investment, and provider of price discovery and liquidity
generation through organized stock exchanges.
•

References
1. http://www.sec.gov.bd
2. https://www.sai.uni-heidelberg.de/workgroups/bdlaw/1993-a15.htm
3. https://www.dsebd.org
4. http://en.banglapedia.org/index.php?title=Securities_and_Exchange_
Commission
5. https://www.slideshare.net/jefframson/jeff-
ramsonsecuritiesexchangecommissionguide