North South University: Securities Law and Competition Law

North South University
Center of Excellence in Higher Education

The First Private University in Bangladesh
School of Humanities and Social Sciences

Department of Law
Course: LLM 516

Securities Law and Competition Law
Lecture: 3 (10 February, 2023)
Dr. Md. Jakerul Abedin

Adjunct Faculty
Today’s Lecture Outline
 Any Difficulties?
 Group Adjustment
 Research Topic Approval, Queries and Progress
 Homework Feedback
 Introduction to the Securities Related Institutions:
FID, BB, BICM, CDBL, ICB, etc.
 Important Understandings
Wednesday, June 14, 2023 2

Homework
Homework Feedback
Group 1:
Group 2:

Securities Law
Link: https://sec.gov.bd/home/laws
Categories of Instruments: Securities Laws,

Rules, Regulations, Order, Notification,
Directive, Guideline etc.
Important Instruments : Ordinance, Act

(আইন), Rules (বিধিমালা), Regulations
(প্রবিধানমালা)
Related Institutions
National
Ministry of Finance: Financial Institutions Division
BSEC, DSE and CSE
Bangladesh Bank
Bangladesh Competition Commission
Bangladesh Institute of Capital Market (BICM)
Central Depository Bangladesh Limited (CDBL)
Bangladesh Academy for Securities Markets (BASM)
Central Counterparty Bangladesh Limited (CCBL)
The Bangladesh Institute of Development Studies (BIDS)
Bangladesh Bureau of Statistics
Today’s Lecture Outline
General Discussions on the Subject

Ministry of Finance
Financial Institutions Division (FID)

Ministry of Finance:
Financial Institutions Division (FID)
Microcredit Regulatory Authority Bangladesh Bank
Insurance Development & Regulatory Sonali Bank Limited
Authority Agrani Bank Limited
BangladeshBangladesh Securities and Rupali Bank Limited
Exchange Commission Janata Bank Limited
Dhaka Stock Exchange Rajshahi Agricultural Development Bank
Chittagong Stock Exchange Ltd. Bangladesh Krishi Bank
Bangladesh Institute of Capital Market Bangladesh Institute of Bank
The Security Printing Corporation Management
(Bangladesh) Ltd. Sadharan Bima Corporation
Investment Corporation of Bangladesh Jiban Bima Corporation
Palli Karma-Sahayak Foundation
Social Development Foundation
This Division started its function in January 2010.
Earlier the related activities had been conducted through a
separate wing of the Finance Division.
FID deals with the law and policy issues related to the Banks,
Non-Bank Financial Institutions, Capital Market, Insurance sector
and Microcredit sector.
FID also co-ordinates the activities for formulating policies on
capital adequacies as well as review of related policies and
programmes.
However, monitoring the utilization of foreign loans and other types of
assistance channeled to different agencies like Bangladesh Bank,
Bangladesh Securities and Exchange Commission (BSEC), Palli
Karma-Sahayak Foundation (PKSF), Social Development Foundation
(SDF), Bangladesh Municipal Development Foundation (BMDF) and
Bangladesh NGO Foundation etc. are also important activities of FID.
Bangladesh Insurance Academy (BIA) and Bangladesh Institute of
Capital Market (BICM) are conducting training programmes for
capacity building under this division.

The division also performs the co-ordination activities
with different regulatory bodies like Bangladesh Bank,
Bangladesh Securities and Exchange Commission
(BSEC), Insurance Development and Regulatory
Authority (IDRA),Microcredit Regulatory Authority
(MRA), Bangladesh Institute of Capital Market
(BICM) and Bangladesh Insurance Academy (BIA) etc.

Vision:
Developing an efficient, inclusive and robust
financial market and services system.
Mission:
Strengthening regulatory and institutional
framework for the development of financial
market and services system.
Mandate of FID
As per Allocation of Business, functions of FID are
as follows-
1. Administration and interpretation of the Bangladesh Bank
Order, 1972 (P.O. No. 127 1972) and orders relating to the
specialized banks and other matters relating to state owned
banks, Insurance and financial institutions.
2. Insurance and law of Insurance.
3. Banking including Co-operative Banking.
4. Regulation of share market and future markets.
Mandate of FID
5. Co-ordination matters relating to
(a) Capital issue; (b) Credit rate policy; (c) Interest rate policy.
6. Review of investment policies and programs.
7. Secretariat administration including financial
matters.
8. Administration and control of subordinate offices
and organizations under this Division.
Mandate of FID
9. Liaison with International Organizations and matters
relating to treating and agreements with other countries and
world bodies relating to subjects allotted to the Division.
10. All laws on subjects allotted to this Division.
11. Inquiries and statistics of any of the subjects allotted to
this Division.
12. Fees in respect of any of the subjects allotted to this
Division except fees taken in courts.
Ministry of Finance

Statutory Authority/Directorate

.
Establishment
 Bangladesh Bank, the central bank and apex

regulatory body for the country's monetary and
financial system, was established in Dhaka as a
body corporate vide the Bangladesh Bank Order,
1972 (P.O. No. 127 of 1972) with effect from 16th
December, 1971.
.
Functions
BB performs all the core functions of a typical monetary and
financial sector regulator, and a number of other non core
functions. The major functional areas include :
 Formulation and implementation of monetary and credit policies.
 Regulation and supervision of banks and non-bank financial
institutions, promotion and development of domestic financial
markets.
 Management of the country's international reserves.
 Issuance of currency notes.
 Regulation and supervision of the payment system.
.
Functions…..
 Acting as banker to the government.
 Money Laundering Prevention.
 Collection and furnishing of credit information.
 Implementation of the Foreign exchange regulation
Act.
 Managing a Deposit Insurance Scheme .
.
Vision
To develop continually as a forward looking central bank with
 competent and committed professionals of high ethical
standards,
 conducting monetary management and financial sector
supervision to maintain price stability and financial system
robustness,
 supporting rapid broad based inclusive economic growth,
 employment generation and poverty eradication in Bangladesh.
.
Mission
BB is carrying out its following main functions as the country's
central bank:
 Formulating monetary and credit policies;
 Managing currency issue and regulating payment system;
 Managing foreign exchange reserves and regulating the
foreign exchange market;
 Regulating and supervising banks and financial institutions,
and advising the government on interactions and impacts of
fiscal, monetary and other economic policies.
.
Towards achieving the mission and vision and performance
commitments of BB, it works to the following diverse broad
stakeholder groups:
 For the Nation
 For the government
 For depositors in banks and financial institutions, investors in
financial assets
 For banks and financial institutions in Bangladesh
 For banks abroad
 For the business community, including farm and non-farm SMEs
 For Bangladeshis abroad
 For their employees
.
Overview of Financial system of Bangladesh

The financial system of Bangladesh is comprised of
three broad fragmented sectors:
1. Formal Sector
2. Semi-Formal Sector
3. Informal Sector
The sectors have been categorized in accordance with their degree
of regulation.
.
The formal sector includes all regulated institutions

like Banks, Non-Bank Financial Institutions (FIs),
Insurance Companies, Capital Market
Intermediaries like Brokerage Houses, Merchant
Banks etc.; Micro Finance Institutions (MFIs).
.

 The semi formal sector includes those institutions which are regulated
otherwise but do not fall under the jurisdiction of Central Bank, Insurance
Authority, Securities and Exchange Commission or any other enacted
financial regulator.
 This sector is mainly represented by Specialized Financial Institutions
like House Building Finance Corporation (HBFC), Palli Karma Sahayak
Foundation (PKSF), Samabay Bank, Grameen Bank etc., Non
Governmental Organizations (NGOs and discrete government programs.
(MCQ)
.
The informal sector includes private

intermediaries which are completely unregulated.
.
The main functions of BB are (Section 7A of BB Order, 1972) -
to formulate and implement monetary policy;
to formulate and implement intervention policies in the foreign exchange
market;
to give advice to the Government on the interaction of monetary policy with
fiscal and exchange rate policy, on the impact of various policy measures on the
economy and to propose legislative measures it considers necessary or
appropriate to attain its objectives and perform its functions;
.
The main functions of BB are (Section 7A of BB Order, 1972) -
to hold and manage the official foreign reserves of Bangladesh;
to promote, regulate and ensure a secure and efficient payment
system, including the issue of bank notes;
to regulate and supervise banking companies and financial
institutions.
.
Core Policies of Central Bank

Monetary policy
Reserve Management Strategy
Interest Rate Policy
Capital Adequacy for Banks and FIs
Deposit Insurance
Insurance Authority
 Regulator of Capital Market Intermediaries
Regulator of Micro Finance Institutions
.
Regulator of Capital Market Intermediaries
The mission of SEC is to protect the interests of securities

investors, to develop and maintain fair, transparent and
efficient securities markets and to ensure proper issuance of
securities and compliance with securities laws.
.
The main functions of SEC are:
1. Regulating the business of the Stock Exchanges or any other securities market.
2. 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.
.
3.Registering, monitoring and regulating of collective investment scheme including all forms of
mutual funds.
4.Monitoring and regulating all authorized self regulatory organizations in the securities market.
5.Prohibiting fraudulent and unfair trade practices in any securities market.
6.Promoting investors’ education and providing training for intermediaries of the securities market.
.
7.Prohibiting insider trading in securities.
8.Regulating the substantial acquisition of shares and take-over of companies.
9.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.
10. Conducting research and publishing information.
Ministry of Finance


 The institute fulfilled the long felt demand of market intermediaries
as well as development partners.
 The idea was first mooted by Chittagong Stock Exchange and a
feasibility study was carried out under World Bank managed multi-
grant TA, FIRST initiative.
 The expatriate consultants recommended setting-up a “Securities
Institute” in Bangladesh for bridging the gap between the
competence and skills required and exist.
 Later, UNDP as well as ADB under their respective TA recommended
for establishment of a “Securities Industries Development Center”
and a “National Capital Market Institute” autonomous in nature.
 Bangladesh Institute of Capital Market (BICM) was
established as a institution for imparting practical capital
market education and training on July 24, 2008.
 The Institute is gradually emerging as a center of
excellence for professional development of capital market
intermediaries and full spectrum of market professionals
through disseminating recent and updated theoretical and
practical knowledge.

Financing
 Since FY 2009-10, the Government of the People’s
Republic of Bangladesh has been continuously
financing BICM.
 From this funding, the cost of infrastructural
facilities and operational expenses of the institute
has been met.

Academic Activities of BICM
 Inauguration of Academic Activities
Postgraduate Diploma Course
Investors’ Education Program
Specialized Courses for professionals and Market
Intermediaries
Future Activities of the Institute

Academic Activities of BICM
Training on New Products of Capital Market
Masters Program
Mandatory Licensing Examination
Distance Learning Programs
Research and Knowledge Management Activities
Co-operation from Development Partners

Securities Law: Institution

CENTRAL DEPOSITORY BANGLADESH LIMITED
https://www.cdbl.com.bd/
CDBL
ABOUT CDBL
Central Depository Bangladesh Limited (CDBL) is the sole

securities depository of Bangladesh and recognized as the
infrastructure backbone of the country's capital market,
operating since 2000. CDBL has evolved to be one of the leading
and most prestigious organizations of the country.

CDBL
OVERVIEW
 CDBL was incorporated on 20 th August 2000 sponsored by

the country's Nationalized Commercial Banks (NCBs),
Investment Corporation of Bangladesh (ICB), Private
Commercial Banks (PCBs), Foreign Banks, Merchant Banks,
Publicly listed Companies, Insurance Companies and Dhaka
& Chittagong Stock Exchanges with the collaboration of the
Asian Development Bank (ADB).
 Legal basis for CDBL's operations is set out in the

Depositories Act, 1999, Depositories Regulations, 2000,
Depository (User) Regulations, 2003, and the CDBL by-laws.
CDBL
OVERVIEW
 CDBL's core services cover the efficient delivery, settlement

and transfer of securities through computerized book entry
system i.e. recording and maintaining securities accounts
and registering transfer of securities; changing the
ownership without any physical movement or endorsement
of certificates and execution of transfer instruments.
 The Central Depository System (CDS) operated by CDBL has
proved to be a convenient and reliable means to settle
securities transaction.
 The investor has been freed from the hassles of physical
handling of certificates, errors in paper work and the risks
associated
Wednesday, June 14, 2023
with damaged, lost and forged certificates. 43
CDBL
OVERVIEW
 CDBL's operations are carried out in its Main Data

Centre which is linked to a remote Disaster Recovery
Centre operating as a backup with data update
taking place simultaneously.
 Network connectivity to Depository Participants,

Issuers, Banks and Stock Exchanges is through Front
End interfaces accessed by WAN link.

CDBL
OVERVIEW
Since 14th February 2003 CDBL has been acting as National Numbering
Agency for International Securities Identification Number (ISIN) as
partner in Bangladesh of Association of National Numbering Agencies
(ANNA) based in Germany.
CDBL is a member of Asia Pacific CSD Group (ACG) and an associate
member of South Asian Federation of Exchanges (SAFE).
CDBL has achieved an ISO/IEC 27001:2013 certificate on Information

Security Management System conforming to the specifications of ISO/IEC
27001:2013 and the best practices adopted in ISO/IEC 27002:2013.

CDBL
VISION AND MISSION
Vision
 Central Depository Bangladesh Limited (CDBL) shall
be a dynamic, forward looking institution committed
to adding value to the business of its clients.
 It will be equipped with up-to-date Information
Technology to ensure prompt customer response and
provide innovative solutions to the needs of the capital
market playing a pivotal role in Bangladesh’s
financial services sector.
CDBL
MISSION
CDBL will have a sound management team with carefully-
chosen, highly-motivated staff fostering a spirit of enthusiasm
balanced with prudent policies to achieve a high level of
sophistication and expertise in the performance of its personnel
by consistently striving to provide high quality services that are
reliable, transparent and efficient by:
•Emphasizing the importance of the customer,
•Unleashing employee initiative by empowering them,
•Viewing activities of the business as processes and the goal of
continuous improvement.
CDBL
MISSION
Management’s leadership endeavor is to forge a

passionate, inspired, motivated and cohesive team to
operate from a fully common bottom line, sharing the
same agenda, driven by the same vision to achieve the
best possible results, not only for the shareholders and
the employees but also to boost public confidence in
CDBL’s growing strength as an independent,
professionally managed institution.
Ministry of Finance

Investment Corporation of Bangladesh (ICB)

 In the backdrop of rapid functional change in economic
policy, the Investment Corporation of Bangladesh (ICB)
was established on 1 October 1976 under "The Investment
Corporation of Bangladesh Ordinance, 1976" (No. XL of
1976).
 The establishment of ICB was a major step in a series of
measures undertaken by the government to accelerate the
pace of industrialisation and to develop a well-organised
and vibrant capital market, particularly the securities
market in Bangladesh.
ICB provides institutional support to meet the

equity gap of the companies.
In view of the national policy of accelerating
the rate of savings and investment to foster
self-reliant economy, ICB assumes an
indispensable and pivotal role.

Through the enactment of the Investment
Corporation of Bangladesh (Amendment) Act, 2000
Act No. 24 of 2000), reforms in operational
strategies and business policies have been
implemented by establishing and operating
subsidiary companies under ICB.
At present the corporation is being operated under
the “Investment Corporation of Bangladesh Act,
2014”.
Objectives
 To encourage and broaden the base of
investments.
 To develop the capital market.
 To mobilize savings.
 To provide for matters ancillary thereto.

Business Policy
 To act on commercial consideration with due regard to the
interest of industry, commerce, depositors, investors and to the
public in general;
 To provide financial assistance to projects considering their
technical, economic and commercial viability;
 To arrange equity support and loans for projects singly or through
consortium of financial institutions including banks;
 To encourage and develop entrepreneurship in the country;
 To diversify investments;
Business Policy
 To inspire small and medium savers for investment in
securities;
 To create employment opportunities;
 To encourage and broaden the base of investment in agro
and information & communication technology (ICT)
sectors.

Functions
 Direct purchase and sale of shares and debentures/bond
including placement and equity participation
 Participating in the placement of Unit Funds and Mutual
Funds
 Providing lease finance singly and through syndication
 Managing investment accounts
 Managing Unit Fund
Functions
 Managing portfolios and taking part in buying & selling of
securities
 Providing advance against Mutual fund certificates managed
by ICB and subsidiaries
 Providing bank guarantee
 Acting as a trustee and a custodian
 Participating in financing of joint venture companies
 Providing investment counseling to investors

Functions
 Participating in government divestment program
 Introducing new business suited to market demand
 Dealing in other matters related to capital market
 Venture Capital Financing
 Taking part in merger, acquisition & asset
reconstruction activities

Functions
 Managing Equity and Entrepreneurship Fund
(EEF), Entrepreneurship Support Fund (ESF) & other
special schemes declared by the Government
 Supervising the activities of the subsidiary companies
as holding company
 Taking part in offloading shares of state owned
enterprises
Important Understandings
 Securities means: “Documents that can be bought or sold and that
reflect ownership or debt.”
The Securities and Exchange Ordinance, 1969
2. 13
[(l) “securities” means any of the following instruments issued or to be
issued, by or for the benefit of a company, whether incorporated in
Bangladesh or not, namely:-
(i) any Government security as defined in the Securities Act, 1920 (X of
1920); and
(ii) other instruments creating a charge or lien on the assets of the
company; and

(iii) instruments acknowledging loan to or indebtedness of the company
and guaranteed by a third party or entered into jointly with a third party,
and includes any stock, transferable share, script, note, debenture,
debentures stock, bond, investment contract 14[, derivative, commodity
futures contract, options contract, exchange-traded fund] and pre-
organisation certificate or subscription, and, in general, any interest or
instrument commonly known as a “security”; and, any certificate of
deposit for, certificate of interest or participation in, temporary or interim
certificate for, receipt for, or any warrant or right to subscribe to or
purchase, any of the foregoing, but does not include currency or any note,
draft, bill of exchange or banker's acceptance or any note which has a
maturity, at the time of issuance, or not more than twelve months,
exclusive of days of grace, or any renewal thereof whose maturity is
likewise limited;]
The Securities Act, 1920 ( ACT NO. X OF 1920 )
Definitions2. In this Act, unless there is anything repugnant in the
subject or context,-
(a)"Government security" means promissory notes (including

treasury bills), stock-certificates, bearer bonds and all other
securities issued by the Government in respect of any loan
contracted either before or after the passing of this Act, but
does not include a currency-note;

(ছ) “ডিপজিটরি” অর্থ বুক এন্ট্রির মাধ্যমে সিকিউরিটির
সংরক্ষণ ও হস্তান্তরের লক্ষ্যে প্রবিধান দ্বারা নির্ধারিত
প্রতিষ্ঠানসমূহের সমন্বয়ে গঠিত ও কোম্পানী আইন এর অধীন
নিবন্ধিত কোন কোম্পানী; [ডিপজিটরি আইন, ১৯৯৯]
(১০) ‘‘ডিমিউচ্যুয়ালাইজেশন’’ অর্থ অনুমোদিত স্কীম অনুযায়ী

যেকোন এক্সচেঞ্জ এর সিকিউরিটিজ লেনদেনের অধিকার
(Trading Right) হইতে উহার মালিকানা ও ব্যবস্থাপনা
পৃথকীকরণ; [এক্সচেঞ্জেস ডিমিউচ্যুয়ালাইজেশন আইন,
২০১৩]ডিপজিটরি
National Law
 The Securities and Exchange
Ordinance, 1969 (Ordinance No. XVII
of 1969)

http://bdlaws.minlaw.gov.bd/act-3
55.html
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North South University

Center of Excellence in Higher Education

School of Humanities and Social Sciences

Course: LLM 516

Dr. Md. Jakerul Abedin

Wednesday, June 14, 2023 2

Wednesday, June 14, 2023 3

Categories of Instruments: Securities Laws,

Important Instruments : Ordinance, Act

General Discussions on the Subject

Wednesday, June 14, 2023 6

Financial Institutions Division (FID)

Wednesday, June 14, 2023 7

Wednesday, June 14, 2023 10

Wednesday, June 14, 2023 11

Financial Institutions Division (FID)

Wednesday, June 14, 2023 16

 Bangladesh Bank, the central bank and apex

Overview of Financial system of Bangladesh

Overview of Financial system of Bangladesh

The formal sector includes all regulated institutions

Overview of Financial system of Bangladesh

Overview of Financial system of Bangladesh

The informal sector includes private

Core Policies of Central Bank

The mission of SEC is to protect the interests of securities

Financial Institutions Division (FID)

Wednesday, June 14, 2023 34

Wednesday, June 14, 2023 36

Wednesday, June 14, 2023 37

Wednesday, June 14, 2023 38

Wednesday, June 14, 2023 39

Financial Institutions Division (FID)

Central Depository Bangladesh Limited (CDBL) is the sole

Wednesday, June 14, 2023 41

 CDBL was incorporated on 20 th August 2000 sponsored by

 Legal basis for CDBL's operations is set out in the

 CDBL's core services cover the efficient delivery, settlement

 CDBL's operations are carried out in its Main Data

 Network connectivity to Depository Participants,

Wednesday, June 14, 2023 44

CDBL has achieved an ISO/IEC 27001:2013 certificate on Information

Wednesday, June 14, 2023 45

Management’s leadership endeavor is to forge a

Financial Institutions Division (FID)

Wednesday, June 14, 2023 49

ICB provides institutional support to meet the

Wednesday, June 14, 2023 51

Wednesday, June 14, 2023 53

Wednesday, June 14, 2023 55

Wednesday, June 14, 2023 57

Wednesday, June 14, 2023 58

(a)"Government security" means promissory notes (including

Wednesday, June 14, 2023 62

(১০) ‘‘ডিমিউচ্যুয়ালাইজেশন’’ অর্থ অনুমোদিত স্কীম অনুযায়ী

Wednesday, June 14, 2023 65

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