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Securities and Exchange Commission Act, 1993

Act No.15 of 1993

An Act made to provide for the establishment of the Securities and Exchange Commission

Whereas it is expendient to establish a commission by the name of Securities and Exchange Commission for the purpose of providing for the protection of the interests of investors in securities, the development of the securities market and for matters connected therewith or ancillary thereto;

Now, therefore, it is enacted as follows:-

1. Short title and commencement.- (1) This Act may be called the Securities and Exchange Commission Act, 1993.
(2) It shall be deemed to have come into force on 20th Vaishakh, 1400/3th May, 1993, respectively

2. Definitions.- (1) Unless there is anything repugnant in the subject or context, in this Act-

a) "Commission" means the Securities and ExchangeCommission established under section 3;
b) "Chairman" means the Chairman of the Commission;
c) "fund" means the Securities and Exchange Commission Fund established under section 12;
d) "regulation" means a regulation made under this Act;
e) "rule" means a rule made under this Act;
f) "member" means a member of the Commission;
g) "permanent member" means a permanent member of the Commission.

3. Establishment of the Commission.- (1) As soon as may be after the commencement of this Act, the Government shall, by notification in the official Gazette, establish a Commission by the name of Securities and Exchange Commission for carrying out the purpose of this Act.
(2) The Commission shall be a body corporate and shall have perpetual succession and a common seal and shall have power to acquire, hold and transfer property, both movable and immovable, and shall by its name sue and be sued.

4. Head office, etc.- (1) The Head Office of the Commission shall be at Dhaka.
(2) The Commission may, if necessary, with the approval of the Government, establish branch offices at any place of the country.

5. Composition of the Commission.- (1) The Commission shall consist of the following members, namely-

a) the Chairman;
b) two permanent members;
c) one officer, not being in rank below a co-secretary, of the Ministry or Department of Finance to be nominated by the said Ministry or Department;
d) one Deputy Governor to be nominated by the Bangladesh Bank from among the Deputy Governors of the said bank.

6. Disqualification of the Chairman etc.- (1) A person shall be disqualified for appointment as, or for being, a Chairman or a permanent member, if-

a) he is an undischarged insolvent;
b) he is declared by a court to be of unsound mind;
c) he has been convicted for a criminal offence involving moral turpitude;
d) he, in the opinion of the Government, abuses of the status of his office in such way that his continuance in office would be contrary to the public interest;
e) he holds the office of a director or officer of any company or institution.

7. Meetings of the Commission.- (1) The meetings of the Commission shall be held at such times and places as may be determined by rules and shall, before that, be held at the times and places decided by the Chairman.
(2) Three members including one permanent member shall form the quorum at a meeting of the Commission.
(3) Every meeting of the Commission shall be presided over by the Chairman and, in his absence, by the Vice-Chairman.
(4) All matters at a meeting of the Commission shall be decided by the votes of the majority of the members present and, in the event of equality of votes, the person presiding shall have a second or casting vote.
(5) No act or proceeding of the Commission shall be invalid or be called in question merely on the ground of any vacancy in, or any defect in the constitution of, the Commission.

8. Functions of the Commission.- (1) Subject to the provisions of this Act and the provisions of the rules, the functions and duties of the Commission shall be to ensure the correct issue of securities, to protect the interests of investors in securities and to develop and control the capital and security market.
(2) In particular and without prejudice to the generality of the provisions mentioned above, such provisions may include any of the following matters, namely:-

a) the regulation of the stock exchange and of the business of any security market;
b) the determination and regulation of the work of stock brokers, sub-brokers, share transfer agents, bankers and managers of issues, trustees of trust deeds, registrars of issues, underwriters, portfolio managers, investment advisers and such other intermediate institutions as are connected with the security market;
c) the registration, regulation and management of any joint investment system including mutual funds;
d) the development, supervision and control of authorized self-control organizations;
e) the stoppage of fraudulent and dishonest transactions relating to securities or the security market;
f) the development of instruction relating to investments and the training of all intermediaries of the security market;
g) the prevention of such dealings in securities as imply the misuse of privileges;
h) the acceptance of the shares or stocks and authorities of companies and the admission and control of companies;
i) the stock exchanges issuing securities and their intermediaries and the calling for information from self-control organizations of the security market, their supervision, investigation and audit;
j) the compiling, analysing and publication of statistics relating to the financial activities of issuers of securities;
k) the imposition of fees or other charges, for carrying out the purposes of this section;
l) the carrying out of such research as may be required for the implementation of the purposes mentioned above and the publication of informations and data;
m) the discharge of such other functions and the performance of such other duties as may be determined by regulations for carrying out the purposes of this Act.

10. Registration certificate.- (1) No stock broker, sub-broker, share transfer agent, banker of issues, trustee of trust deeds, registrar of issues, underwriter, portfolio manager, investment adviser and no other such intermediary connected with the security market may sell or deal in any security otherwise than subject to regulations or the conditions of the registration certificate received from the Commission:
Provided that every person or stock broker, sub-broker, share transfer agent, banker of issues, trustee of trust deeds, registrar of issues, underwriter, portfolio manager, investment adviser and other such intermediary connected with the security market who has been selling or buying securities immediately before the establishment of the Commission may, for a period of six months or, if he has made an application for registration, until the decision of the application, continue in his profession.
(2) Applications for registration shall be made in such manner and under payment of such fee as may be determined by regulations.
(3) The Commission may, in such manner as may be prescribed by regulation, suspend or cancel any registration certificate:
Provided that no order under this sub-section shall be made without giving reasonable opportunity for hearing to the person or institute concerned.

11. Duties and responsabilities under Act XXIX of 1947 and Ord. XVII of 1969, etc. .- Immediately after the establishment of the Commission-

a) the expression "Controller of Capital Issues" in every Act other than this Act or every agreement, instrument and document shall be deemed to have been substituted by the word "Commission";
b) the office of the Controller of Capital Issues, if any, shall be abolished;
c) all the duties and responsabilities of the Government under the Capital Issues (Continuance of Control) Act, 1947 (XXIX of 1947) and the Securities and Exchange Ordinance, 1969 (XVII of 1969), heretoafter referred to as the said two Acts, shall be duties and responsabilities of the Commission;
d) all agreements concluded and all matters settled by or with the Government under the said two Acts shall be deemed agreements concluded and matters settled with the Commission;
e) all suits, cases and other legal proceedings filed by or against the Government under the said two Acts shall be deemed filed by or against the Commission;
f) anything pending before the Government in accordance with the provisions of the said two Acts shall be decided by the Commission in accordance with the provisions of the said two Acts.

13. Annual budget statement.- The Commission shall every year, within such period as the Government may direct, submit to the Government an annual budget statement for the following financial year showing the amount of money which may be required from the Government for the said financial year.

14. Accounts and audit.- (1) The Commission shall maintain its accounts properly and prepare annual statements of accounts.
(2) The Controller and Auditor-General of Bangladesh, heretoafter referred to as the Auditor-General, shall every year audit the accounts of the Commission and shall send a copy of the audit report to the Government and the Commission and the Government shall provide for its presentation at the national assembly.
(3) For the purpose of an audit under sub-section (2), the Auditor-General or any person authorized by him shall have access to all records, documents, cash and money deposited with banks, securities, stores and other property of the Commission and may examine any member, officer and employee of the Commission.

15. Reports, etc. . (1) The Government may, if necessary, call for reports and statements from the Commission on any matter of the Commission and the Commission shall be bound to supply such reports and statements.
(2) The Commission shall, within sixty days after completion of every financial year, submit to the Government a report together with the account-books on its activities during the preceding financial year and the Government shall, as fast as possible, provide for its presentation at the national assembly.

16. Power of the Government to give directions. The Government may give the Commission any direction for carrying out the purposes of this Act and the Commission shall be bound to comply with such directions.

17. Delegation of powers.- The Commission may, subject to well-defined conditions, delegate to the Chairman, any other member or any officer any of its powers or responsabilities except the power to make regulations.

18. Punishment.- Whoever contravenes or intends to contravene or aids and abets to contravene any provision of this Act shall be punishable with a term of imprisonment not exceeding five years or a fine not exceeding five hundred thousand Takas or both.

19. Cognizance.- (1) No Court other than a Session Court shall take cognizance of any offence under this Act.
(2) No offence under this Act shall be taken cognizance of except on a complaint in writing made by the Commission or any person authorized by the Commission.

20. Offences by companies.- If the person contravening any of the provisions of this Act is a company, the owner, director, manager, secretary or any other officer or agent of the company shall be deemed guilty of the contravention of the provision, unless he proves that the contravention was committed without his knowledge or that he exercised all due diligence to prevent the contravention.

21. Appeal.- (1) Any person aggrieved by an order passed by any member or officer in accordance with this Act, the rules or regulations may, within such period as may be specified by regulation, prefer an appeal to the Commission against such order and the decision of the Commission thereupon shall be final.
(2) No appeal filed after the expiration of the specified period shall be acceptable, but if the appellant satisfies the Commission to the effect that there existed reasonable grounds for the appeal not to have been filed within the specified period, the Commision may accept an appeal filed after the expiration of the specified period.
(3) An appeal under this section shall be made in such form, and shall be accompanied by such fee, as may be specified by regulation and shall be filed together with a copy of the order against which it has been filed.
(4) Every appeal shall be decided on in such manner as may be specified by regulation; and no appeal shall be decided on without giving reasonable opportunity for hearing to the appellant.
(5) The Commission may, at its own instigation or in the light of any application, reconsider any matter already decided upon and in this case the decision of the Commission shall be final.

22. Protection of action taken in good faith.- No prosecution, suit or other legal proceeding shall lie against the Government, any public officeror employee, any member, officer or employee of the Commission for any damage caused or likely to be caused to any person as a result of any action taken in good faith under this Act, the rules or regulations.

23. Exemption.- The Commission may, if it deems necessary or expedient for the preservation of the public interests so to do, exempt any person or institute from the provisions of section 10 (1) under this Act regarding the selling and buying of securities or any other matter connected therewith.

24. Power to make rules.- The Government may, by notification in the official Gazette, make rules for carrying out the purposes of this Act.

25. Power to make regulations.- The Commission may, on prior consent of the Government and by notification in the official Gazette, make such regulations as are not inconsistent with the provisions of this Act or rules for carrying out the purposes of this Act.

26. Power to remove difficulties.- (1) If any difficulty arises in giving effect to the provisions of this Act, the Government may, by order, take any measure for the purpose of removing such difficulty:
Provided that no order under this section shall be issued after the expiry of five years from the date on which this Act came into force.
(2) The Government shall, as fast as possible, present every order passed under this section at the national assembly.

27. Repeal and savings.- (1) The Securities and Exchange Commission Ordinance, 1993 (Order No.3, 1993) stands herewith repealed.
(2) Notwithstanding such repeal, any action done or any measure taken under the repealed Ordinance shall be deemed to have been done or taken under this Act.