assignment on bangladesh securities and exchange commission

Securities and Exchange Commission

Securities and Exchange Commission is a government body under the ministry of finance established to regulate the securities market in Bangladesh. It was established on 8 June 1993 under the Securities and Exchange Commission Act 1993. Prior to its establishment, the securities market was regulated under Capital Issues Act 1947. The main office of SEC is at Dilkusha Commercial Area, Dhaka.

SEC is headed by a chairman appointed by the government and has four members under the chairman. Two of the members are full-time executives and are nominated directly by the government. Of the other two, one is a nominee of the bangladesh bank and the other, of the ministry of finance. The members are responsible for registration, capital issue, corporate audit, administration and finance, supervision and monitoring the corporate and legal affairs, research and development, and education and training. In addition to members, there are four executive directors, one corporate accountant, and one legal counselor.

The prime objectives of SEC are to protect integrity of the stock market and the interests of the investors in securities, to develop the securities market, to ensure proper issuance of securities, and to promulgate new laws, orders, rules and regulations for controlling, and guiding the securities market. SEC is to protect the interests of investors through regulating the market within the framework of the SEC Act. It approves capital issues and prospectus, restricts illicit transactions and insider trading, and controls the stock exchanges , securities related firms, and companies involved in the public issue of securities. As a part of these functions, SEC monitors disclosure functions of the companies, timely holding of annual general meetings by them, timely payment of dividends and timely issuance of allotment letters and refund warrants by security issuers.

Since its inception in 1993, SEC plays a significant role in the securities market. A major function of SEC is to curb the irregularities prevailing in the market. To control and raise the efficiency of the market, SEC promulgated the following orders and regulations since 1993: (a) Securities and Exchange Commission (stock broker, stock dealer and authorised representative) Regulation 1994; (b) Securities and Exchange Commission (merchant banker and portfolio manager) Regulation 1995; (c) Securities and Exchange Commission (mutual fund) Regulation 1997; (d) Credit Rating Rules 1997; (e) Securities and Exchange Commission (control of insider trading) Regulation 1995; (f) Public Issue Rules 1998; (g) Right Issue Rules 1998; and (h) Depository Act 1999.

SEC issues/cancels registration certificates to stock dealers, brokers, merchant banks, authorised representatives of members, and all intermediaries working in the securities market. Market surveillance is an essential activity of SEC. It analyses the price fluctuations in both Dhaka and Chittagong Stock Exchanges. As part of supervision and regulation of markets and its intermediaries, SEC receives and takes initiatives to settle complaints against stockbrokers and firms/companies and takes actions, including charging fines and issuing warnings for detected irregularities. It also takes legal steps against the defaulting companies and firms.

SEC conducts research on the dealing behaviour in the securities market and regularly publishes the findings. SEC has a number of informative publications, which includes Annual Report of SEC, Quarterly Reviews and the SEC Parikrama (Bangla). It also periodically publishes manuals and handbooks. To educate the investors and intermediaries SEC implements some programmes including investors' training for corporate and individual investors and training programmes for authorised representatives of the members of DSE and CSE. [Ishtiaque Ahmed Khan]

• This page was last edited on 17 June 2021, at 19:33.
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May 31, 2024

Business & Economy

Shibli rubayat, a teacher of banking and insurance, will head sec for 4 years.

The government has appointed Professor Shibli Rubayat Ul Islam, who teaches banking and insurance at Dhaka University, as the chairman of Bangladesh Securities and Exchange Commission.

Staff Correspondent

bdnews24.com

Published : 17 May 2020, 06:34 PM

Updated : 17 May 2020, 06:34 PM

Prof Shibli, who has been heading Sadharan Bima Corporation as its chairman for about three and a half years, will head the stocks regulator for four years, the finance ministry said in a notice on Sunday.

He got the new assignment as incumbent chief M Khairul Hossain’s nine-year stint at the commission came to an end on May 14. Khairul, a Dhaka University finance teacher, had three terms at the helm of the SEC.

The finance ministry had sent a proposal to the Prime Minister’s Office recommending names for the BSEC chairman and three commissioners, an official with knowledge of the matter, had earlier said. The SEC has four positions of commissioner.

Earlier, an official said Shibli becoming the chief of the stock market regulator was “almost certain”. The public administration ministry would issue the order on the appointment on approval from Prime Minister Sheikh Hasina, he added.

Prof Shibli has spent more than two decades teaching finance, banking and insurance, and played a key role in many businesses, chambers and researches related to his fields at home and abroad.

He has more than 16 research publications in his field and five international research papers to his name. He has authored “E-Banking and E-Commerce”, a book for the tertiary level and “Finance and Banking”, a textbook for secondary students.

The new BSEC chairman specialises in law and practice of banking, retail and e-banking, foreign exchange and international banking, corporate governance, legal aspects of business and fundamentals of insurance.

He is a guest professor at the Sichuan University at Chengdu in China until 2021. He was also awarded for the best research paper presented at the BAKUMSEM conference.

Prof Shibli also has research degrees, diploma and training in the UK, Australia and South Korea.

His wife Shenin Rubayat, a faculty at BRAC University’s Department of English and Humanities, is an English newscaster at BTV.

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BSEC moves to form Islamic capital market

The Bangladesh Securities and Exchange Commission has moved to launch a separate market – Islamic capital market – in order to allow trading of Sharia-based securities in compliance with Islamic laws.

The Bangladesh Securities and Exchange Commission made the announcement in a statement on Monday.

BSEC officials said that Islamic capital market (ICM) would operate as a parallel market to the conventional one.

Trading under the ICM would be carried out in ways that do not conflict with principles of Shariah laws, they said.

To achieve the goal, the commission formed a-nine member advisory council committee to develop the market.

The commission made it mandatory to form a nine-member Shariah advisory council consisting five Shariah scholars and four experts as per the Bangladesh Securities and Exchange Commission (Securities Market Shariah Advisory Council) Rules 2022.

Mohammad Abdur Rashid was made chairman of the Shariah advisory council.

Besides, Mufti Shahed Rahmani, Mufti Yousuf Sultan, Islamic Foundation deputy director Mufti Waliur Rahman Khan and Mawlana Shah Mohammad Wali Ullah are the five Shariah scholars.

Finance and banking expert Abu Taleb, legal expert AKM Nurul Fazal Bulbul, accounting expert Md Nazim Uddin Bhuya and capital market expert Mezbah Uddin Ahmed are the four experts.

The commission will lead to an increase in number of Shariah-based securities in the market.

According to the BSEC, currently, about 35 per cent of securities on DSE are Shariah compliant

BSEC executive director Rezaul Karim told New Age that the demand for Shariah-compliant securities was rising and to attract investors, the stock market regulatory body moved to form the separate platform to attract Shariah investors.

‘The council shall inform the BSEC in writing to take action against an issuer concerned in case of any deviation in compliance with Shariah principles,’ he said.

‘If there is any problem in complying with the Shariah law, the solution given by the council will be considered final,’ he said.

He said, ‘There are a large number of Shariah-compliant investors in the country. Investors from other Muslim countries also prefer Shariah-compliant securities.’

To attract the large number of Shariah clients conventional banks also have Islamic windows.

New Shariah-based securities such as Mudaraba perpetual bonds, Sukuk bonds and Shariah-compliant mutual funds have been issued on the Islamic capital market.

Some 100 listed companies are under the Shariah index which declined by 2.34 points to close at 1,362.24 points on the Monday.

• Bangladesh Securities and Exchange Commission
• capital market

HRM Practices of Securities and Exchange Commission

Main objective of this report is to analysis HRM Practices of Securities and Exchange Commission in Bangladesh, report focus on Hazrat Amanat Shah Securities Limited (HAS). Other objectives are get an overview of Dhaka Stock Exchange and Hazrat Amanat Shah Securities Limited. Finally investigate the functions, activities and developments of DSE also identify the various systems of human resource practices by HAS and DSE.

Introduction

The capital market is the market of securities, where companies and the government can raise long-term funds. The capital market includes the stock and the bond market. The SEC is the capital market watch dog which regulates the capital market operation to ensure is protected against fraudulent activities.

The capital market plays vital role in the industrialization of the required to create employment opportunities for the unemployed people and a strong capital base for the economic modernization to alleviate poverty.

The growth of capital market largely depends on the policy decision of the Government. Capital market is the mechanism to mobilize excess liquidity of the market to form a strong capital base required for rapid industrialization. A vibrant capital market in one of the key players to strengthen the pace and process of industrialization in a developing country like Bangladesh.

Objective of the study:

• To make an overview of Dhaka Stock Exchange.
• To make an overview of Hazrat Amanat Shah Securities Ltd.
• To identify the various systems of human resource practices by HAS and DSE.
• To investigate the functions, activities & developments of DSE.

Methodology of the study:

• In preparing the report published materials, papers and documents of DSE are used. Also consultation in made with personnel belonging to Hazrat Amanat Shah Securities Ltd ., Dhaka Stock Exchange Library. Security Exchange commission (SEC). Central Depository Bangladesh Limited. Also materials are obtained from websites
• Data finding, analysis and interpretation.

Definition of Capital Market:

It is a Platform/Board/Forum, usually recognized by the concerned Regulatory Authority – Security Exchange Commission (SEC) in Bangladesh, Where shares or securities listed with the Stock Exchanges are traded by the general Public through Stock Brokers.

However, where the debentures, debts, bonds, etc are traded that is usually called Bond market. Also, where the business/ventures futures are traded that is classified as Future market.

Identically, where commodities are traded that is called commodities/commodity-wise (named) Market like the Metal market-London, Oil market-Singapore, Gold market-South Africa and Commodities market-Canada.

Unfortunately, no such formal Market like Bond, Future and Commodities has/have yet been introduced/ established in Bangladesh.

Structure of Capital market:

Financial Markets can be categorized as those dealing with newly issued financial claims into Primary market and Secondary Market.

Primary market: The first portion is primary market where securities issues for raise equity for respective company/organization.

Secondary market : The market for exchange financial claims those previously issued in market and a secondary market is that in the secondary market the issuer of the asset does not receive funds from the buyers Rather the existing issue changes hands in the secondary market and the fund flow from the buyer of the asset to the seller.

Third Market: It is one kind of OTC market where trading of share of listed on an exchange.

Fourth Market: It is a financial market where trading occurs between two parties directly with out help of intermediary.

History of Dhaka Stock Exchange:

The DSE was first incorporated as East Pakistan Stock Exchange Association Limited on April 28, 1954. However formal trading began in 1956 with 196 securities listed on the DSE with a total paid up capital of about Tk. 4 billion. On June 23, 1962 it was renamed as East Pakistan Stock Exchange Limited. After 1971, the trading activities of the stock Exchange remained suppressed until 1976 due to the liberation was and the economic policy pursued by the government. The trading activities resumed in 1976 with only 9 companies listed having a paid up capital of Tk. 137.52 Million on the stock exchange. In May 13, 1964 it was rename as Dacca Stock Exchange and in 1986 was renamed as Dhaka Stock Exchange Limited.

History of Hazrat Amanat Shah Securities Ltd.:

Hazrat Amanat Shah Securities Ltd. was started its business in capital market from October 22, 2009, its member no. in DSE is 173. Though it is newcomer in the capital business, but it is now one of the leading brokerage houses in Bangladesh. It has now 12 branches all over the country. About 250 employees are serving in the Hazrat Amanat Shah Securities ltd. The head office and branch of HAS is Moon Mansion, 12 Dilkusha, motijheel.

Major events of DSE:

• Incorporate as East Pakistan Stock Exchange Association Ltd – 28 April 1954.
• Starting formal Trading – 1956
• Renamed as East Pakistan Stock Exchange Ltd – 23 June 1964
• Renamed as Dacca Stock Exchange Ltd. – 13 May 1964
• Trading Started in Bangladesh – 16 August 1976
• Starting of DSE all share price index calculation – 16 October 1986
• DSE all share price index calculation Started on the basis of IFC design formula  – 1 November 1993
• Starting Automated Trading – 10 August 1998
• Starting DSE 20 Index – 1 January 2001
• Starting CDS – 24 January 2004
• Starting Govt. Bond market – 1 January 2005
• DSE all share price index reintroduced – 28 March 2005
• Direct listing regulations 2006 introduced – 12 April 2006.

Support organization: Securities & Exchange Commission

The Securities and Exchange Commission (SEC) was established on 8th June, 1993 under the Securities and Exchange Commission Act, 1993. The Chairman and Members of the Commission are appointed by the government and have overall responsibility to administer securities legislation. The Commission, at present has three full time members, excluding the Chairman. The Commission is a statutory body and attached to the Ministry of Finance.

Missions of SEC:

• Protect the interests of securities investors.
• Develop and maintain fair, transparent and efficient securities markets.
• Ensure proper issuance of securities and compliance with securities laws.

Functions of SEC:

• 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 Securities & Exchange Commissioners 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.

Support Organization : Central Depository Bangladesh Limited

About CDBL:

Central Depositor Bangladesh Limited (CDBL) was incorporated as a public limited company on 20th August 2000 to operate and maintain the Central Depository System (CDS) of Electronic Book Entry, recording and maintaining securities accounts and registering transfer of securities; changing the ownership without an physical movement or endorsement of certificates and execution of transfer instruments, as well as various other investor services including facilitation of the secondary market trading of Treasury Bills and Government Bonds issued by the Bangladesh Securities & Exchange Commission.

Central Depository Bangladesh Limited (CDBL), a joint venture company setup by Securities & Exchange Commissions, stock exchange, Asian Development Securities & Exchange Commission and other institutions operates the Central Depository System (CDS) in Bangladesh.

CDBL, by converting physical certificates into electronic form, will eliminate the risks of damaged, lost, forged and duplicate share certificates. The instantaneous delivery through electronic book entry will result in immediate transfer of ownership, which presently can take over a month. CDBL, in the long term, will also reduce the costs of the investing public.

Participants of CDBL:

• Stock brokers/dealers (members of the Dhaka and Chittagong Stock Exchanges);
• Securities & Exchange Commissions.
• Financial institutions;
• Insurance companies;
• A statutory organization;
• Merchant Securities & Exchange Commissioners;
• Asset managers;
• Custodians; and
• Other capital market intermediaries registered with the SEC.

Category of CDBL Participants :

• Trading Participant : May only settle stock exchange trades and cannot maintain accounts on behalf of customers;
• Full Service Participant: This is a stock exchange member who may hold shares and operate accounts on behalf of customers.
• Custody Participant : May hold shares and operate accounts on behalf of customers but is not a stock exchange member;
• Settlement Agent Participant: May settle stock exchange trades on behalf of stock exchange members.

Method of Operation of CDBL:

• The investor opens an account with a participant or CDBL
• Certificates are ‘ dematerialized’ by lodging them at the issuer.
• The issuer updates the register and moves the holding to the depository portion of the register.
• The investor sells on a stock exchange through a stockbroker and another investor buys.
• The stock exchange advises CDBL to update its records.
• CDBL debits the sellers account.
• CDBL credits the buyers account.
• Investors may dematerialize if they wish.

Functions & Activities of Dhaka Stock Exchange:

Functions of Dhaka Stock Exchange :

• Listing of Companies. (As per Listing Regulations).
• Providing the screen based automated trading of listed Securities.
• Settlement of trading. (As per Settlement of Transaction Regulations)
• Gifting of share / granting approval to the transaction/transfer of share outside the trading system of the exchange (As per Listing Regulations 42)
• Market Administration & Control.
• Market Surveillance.
• Publication of Monthly Review.
• Monitoring the activities of listed companies. (As per Listing Regulations).
• Investor’s grievance Cell (Disposal of complaint bye laws 1997).
• Investors Protection Fund (As per investor protection fund Regulations 1999)
• Announcement of Price sensitive or other information about listed companies through online.

Activities of Dhaka Stock Exchange.

Clearing and Settlement :

The Clearing and Settlement module provides the management of trade from the point of entry into the Settlement Pool trade database until it has been delivered and settled and removed from the Settlement Pool. It consists of three major business processes.

Clearing: Participant trade reporting and affirmation, billing, assigning settlement instructions.

Settlement: the process of overseeing that delivery of all instruments to the buyer and payment of all moneys to the seller has occurred before removing the trade from the settlement pool.

Regulation 4 of the Settlement of Stock Exchange Transactions Regulation 1998 has been given effect time to time. A new directive was made by SEC dated on 18th March 2003 “Adjusted due position mechanism for settlement of scrip only as provided by regulation 4(1) of settlement of Stock Exchange Transaction Regulations, 1998 shall remain suspended from 19th March 2003 until further order”.

As per Commission (SEC) decision, dated 5th December 2006, new netting settlement system has been implemented from 10th December 2006. Some of the listed instruments had been placed in non-netting group and others were in netting group. The “day netting” system was continuing for the netting instruments. Non- netting group, which is in compulsory spot market, the transactions are not netted. The transactions are settled by depositing all the shares sold and paying full amount for the shares purchased.

Here is a complete picture of the settlement system for all of our 310 Instruments in Five (5) groups in the four (4) markets.

A Group: Number of Instruments are 145 (123 + 8D + 14M), Here D for Debentures, M for Mutual funds & TB for Treasury Bonds (Trading in Public, Block & Odd-lot Market with trade for trade settlement facility for scrip only through DSE Clearing House on T+1, T+3 basis). “A” and “DA” is marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading Software.

This cycle is valid for A, B, G & N category instruments traded in Public, Block & Odd-lot market

B Group: Number of Instruments are 33 (Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1, T+3 basis). “B” and “DB” is marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software.

G Group : Number of Instrument is 1 (Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1, T+3 basis). “G” and “DG” is marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software.

N Group: Number of Instrument is 4 (Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+1, T+3 basis). “N” and “DN” is marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software.

Z Group : Number of Instruments are 93 (Trading in Public, Block & Odd-lot Market with trade for trade settlement facility through DSE Clearing House on T+3, T+7 basis). “Z” and “DZ” is marked in BASES columns for Non-Demat & Demat instrument respectively in our TESA Trading software.

This cycle is valid only for Z group instruments traded in Public, Block & Odd-lot market.

SETTLEMENT FOR DIFFERENT CATEGORIES INSTRUMENTS

 01) For A group Instruments:

02) For B group Instruments:

03) For G group Instruments:

04) For N group Instruments:

As netting system for shares has withdrawn, for A, B, G & N group instrument, member will have to deposit the full shares at the DSE on T+1 after selling the shares, In case of purchasing such shares, the buyer will have to deposit the Balanced (Netted) money traded in Public, Block & Odd-lot market at the DSE on T+1.

05) For Z group Instruments

Under the Trade for trade settlement system, member will have to deposit the full money at the DSE on T+3 after purchasing the shares, In case of selling such shares, the seller will have to deposit the full shares at the DSE on T+3.

Surveillance at DSE:

The main objective of the Surveillance function of the Exchange is to promote market integrity in two ways–

• By monitoring price and volume movements (volatility) as well as by detecting potential market abuses at a nascent stage, with a view to minimizing the ability of the market participants to influence the price of the scrip in the absence of any meaningful information.
• By managing default risk by taking necessary actions timely.

Market Abuse is a broad term which includes abnormal price/volume movement, artificial transactions, false or misleading impressions, insider trading, etc. In order to detect aberrant behavior/ movement, it is necessary to know the normal market behavior–

The department carries out investigation, if necessary, based on the preliminary examination/analysis and suitable actions are taken against members involved based on the investigation.

All the instruments traded in the market come under the Surveillance umbrella of DSE. Surveillance activities at the Exchange are divided broadly into two major segments:

• Price Monitoring: Price monitoring is manly related to the price movement/ abnormal fluctuation in prices or volumes etc.
• Position Monitoring: The position monitoring relates mainly to abnormal positions of members, etc. in order to manage default risk.

Price Monitoring

The functioning of the Price Monitoring is broadly divided into following activities–

• On line Surveillance:

One of the most important tools of the Surveillance is the On-line Real Time Surveillance system with main objectives of detecting potential market abuses at a nascent stage to reduce the ability of the market participants to unduly influence the price and volumes of the scrips traded at the Exchange, improve the risk management system and strengthen the self regulatory mechanism at the Exchange. The system provides facility to access trades and orders of members.

• Off-Line Surveillance:

The Off-Line Surveillance system comprises of the various reports based on different parameters and scrutiny thereof–

• High/ Low Difference in prices
• % change in prices over a week/ fortnight/ month
• Top N scrips by Turnover over a week/ fortnight/ month
• Top N scrips by Volume over a week/ fortnight/ month
• Trading in infrequently traded scrips
• Scrips hitting New High / Low etc.

The Surveillance actions or investigations are initiated in the scrips identified from the above-stated reports.

• Investigations:

Conducting in-depth investigations based on preliminary enquiries/analysis made into trading of the scrip. In case of irregularities observed, necessary actions are initiated or investigation case forwarded to SEC, if necessary through the CEO.

Surveillance Actions:

• Warning to Members: The department may issue verbal/ written warning to member/s when market irregularities in the scrip are suspected.
• Imposition of penalty/ suspension: The department, through the CEO, imposes penalty or suspend the member/s who are involved in market irregularities, based on the input/ evidence available from investigation report.

Rumor verification:

• Liaising with Compliance Officers of companies to obtain comments of the company on various price sensitive corporate news items appearing in selected News Papers.
• Comments received from the companies are disseminated to the market by way of online news bulletin.
• Investigations based on rumor verifications are carried out, if required, to detect cases of suspected insider trading.

Position Monitoring

The Surveillance Department closely monitors outstanding exposure of members on a daily basis. For this purpose, it observes various off-line and on-line market monitoring reports. The reports are scrutinized to ascertain whether there is excessive purchase or sale position build up compared to the normal business of the member, whether there are concentrated purchases or sales, whether the purchases have been made by inactive or financially weak members and even the quality of scrips is considered to assess the quality of exposure.

The following key areas are examined to assess the market risk involved –

• Online monitoring of Brokers Position: surveillance closely monitors broker’s gross turnover exposure for ensuring margin calls in time.
• B/S Statement of Trading Members: Scrutinizing the statement on daily basis. It is for keeping a watch on the exposure of the members & ascertains the quality of exposures.

A detailed report on the net outstanding positions of top purchasers and top sellers in individual scrips, is prepared, if considered necessary.

• Concentrated B/S: It is considered a risky issue. In case, such a situation is noticed, fundamentals of the scrips, their daily turnover, and their nature of transactions are ascertained. Thereafter, based on the market risk perception appropriate surveillance actions are taken.
• B/S of scrips having thin trading: It is closely scrutinized as comparatively high market risk is involved in trading in such scrips. Details of trades in such scrips, if necessary, are called from members to assess the market risk involved & decide on the appropriate surveillance action.
• Verification of Institutional Trade: The institutional trades executed by the trading members are verified to ascertain the genuineness of trades.
• Verification of Foreign Trade: The foreign trades executed by the trading members are verified to ascertain the genuineness of trades.
• Verification of Cross Reporting Trade: The report crossing trades executed by the trading members are verified to ascertain the genuineness of trades.
• Verification of Dealers own trades: Trades executed by the trading members (Dealers) are verified to ascertain the genuineness of trades.
• Verification of Sponsor’s Trade: The Sponsors trades executed by the trading members are verified to ascertain the genuineness of trades.
• Snap Investigation: To carry out, wherever considered necessary, preliminary investigation of certain dealings to verify irregularities. Further actions, viz., referring the case for detailed investigation, referring the case to the Sec, depending on the findings of preliminary investigation.
• Market Intelligence: The rumors floating in the market are verified with the data available with DSE, Newspapers, Television news channels & Reuters to ascertain the national & global factors affecting the market sentiments. This enables the Exchange to avert market problems before it causes a serious damage.
• Review Block Trades:

To determine —

• Whether the block was executed at a price, even if at a discount or premium which was in line with other trading of the stock.
• Whether there was any news on the company which caused the price increase or decrease subsequent to the block transaction.
• Review List of Settlement Failures: To identify —
• broker/s with frequent failures
• a particular stock with a pattern.
• Verify Company Accounts: To scrutinize company announcements, company reports, auditors qualifications & other notes of special interests in the published accounts of such company
• Review Media Information: To scrutinize press articles or other media on the daily basis, the news relevant to the share prices of companies.
• Monitoring on Newly Listed Stock: To review all activities of a newly listed stock for the first 1 / 2 weeks to identify any abnormal deal.
• Develop Good Liaison: To develop & maintain good liaison with staff members of SEC & listed companies & member firms as well.
• Develop market contacts & to pick up Intelligence.

Trade segment of markets :

• Public market : For general trading of securities.
• Spot Market : For pre-book closer trading.
• Odd Lot market : Any transaction for odd lot.
• Block Market : Block market trannsaction involved trading of Tk. 0.5 milion or above

Criteria of Share category.

“A” Category Companies: Companies which are regular in holding the Annual general meeting and have declared dividend at the rate of 10 percent or more in a calendar year.

“B” Category Companies: Companies which are regular in holding the Annual general meeting but have failed to declare dividend at least at the rate of 10 percent in a calendar year.

“Z” category Companies : Companies which have failed to hold the annual general meeting or failed to declare any dividend or which are not in continuously for more than six months or whose accumulated loss after adjustment of revenue reserve, if any, is negative and exceed its paid up capital.

”G” Category Companies: Green field Companies.

“N” Category companies: All newly listed companies expect Greenfield companies will be placed in this category and their settlement system would be like B-category companies.

Types of Securities listed in market:

Market Capitalization to GDP.

Portfolio investment Vs. Foreign Direct Investment

Opportunity for NRB investments to DSE:

The authority has already offered a wide range of facilities and incentives for attracting investment from both foreigners and Non resident of Bangladeshi’s.

Opportunities for foreign investors: Bangladesh has adopted a very liberal industrial policy to attract foreign investment.

• No limitations pertaining to equity participation. I.e. up to 100 percent foreign private investment allowed.
• Greater facility for establishing industry in EPZ.
• Except five reserve sectors, all in industries are open for private investment.

Non-Resident Bangladeshi’s can enjoy the existing facilities: Non-Resident Bangladeshi’s enjoy facilities similar to foreign investors.

• Allowed to buy newly issued shares/debentures of Bangladeshi companies.
• 10 percent reserved quota for NRB in primary shares.
• FC deposits in the NFCD account.

Investment guarantee:

• Foreign private investment (promotion & protection) act 1980 ensures legal protection to foreign investment in Bangladesh against nationalization and expropriation.
• It also guarantees repatriation of capital and dividend and equitable treatment with local investors.
• Adequate protection is available for intellectual property rights such as patents, designs & trademarks and copyrights.

Other facilities and incentives:

• Tax holiday 5-10 years depending on location of industries.
• 15 years tax holiday for private power generation companies.
• Facilities for repatriation of invested capital, profit & dividend.
• Exemption of tax on interest on foreign loan.
• Tax exemption on royalties, technical know-how & technical assistance fees.
• Avoidance of double taxation on the basis of bilateral agreements.

Demand and supply of securities.

Interpretation: Given data table shows company offer IPO to offload shares to public and found feedback as subscription amount high 105 times and average 15 times for every security. And that implies public demanding for quality securities.

P/E ratio by sector.

Dividend payment performance by industry.

SWOT Analysis of DSE :

• Tremendous growth of new investor.
• Over 137% growth of market capitalization.
• Financial sector performance growing upward trend.
• New introduction of Govt. Bond & corporate bond market.
• Established Central Depository Bangladesh Limited.
• Strong monitoring & controlling of SEC over DSE.
• Lack of market skillfulness.
• Share price rise inconsistently.
• Unavailability of investment consultant.
• Complexity of tax structure.
• Information was not sufficiently transparent and efficient.
• Don’t establish any capital market institute.
• The unwillingness for providing the flow of information by the DSE.
• Scarcity of foreign investment.
• The lack of Varity of the securities.
• Lack of operation monitoring of listed company.
• The lack of quality securities.

Opportunity:

• Growth of new investor demanding for more security.
• Perfect opportunity for privatization of Govt. weak company.
• To create more participation to General public.
• To give alternative source of investing from capital market to public.
• Alternative financing source to Government to infrastructure or development finance.
• Supply more liquid money to invest on limited security by merchant Securities & Exchange Commission or participant.
• Lack of confidence of the new investor.
• Public always looking for capital gain with in short time for that market fluctuation is very high.
• Lack of public awareness.
• Code of ethics not being followed and dubious role-played by professionals Chartered Accountant in certifying financial statements along with the valuation of assets properties.
• Influx of new and unsophisticated investor and speculators.
• Insider trading and off-loading of shares by the directors of the company.
• Political situation of the country.

HRM PRACTICES

In common with most organizations, HAS’s performance depends on the quality and commitment of its people. Accordingly, the Brokerage stated strategy is to attract, retain and motivate the very best people and therefore HAS always conscious about human resource planning. They follow the motto, which is “Finding and keeping the best employees.”   The HAS analysis the following human resource planning criteria.

The overall plans are included the following factor:

• Manpower plan: HRD of BBL first designed the plan about manpower for their new branch expansion or fill up the vacant post.
• Job Analysis: A sound job analysis give good support to the HRD. So BBL plan a affective job analysis so that the applicant or employee can easily understand the job criteria, responsibilities and employee incentives, benefits and other facilities.
• Recruitment and placement process: In which way the talent employee will be recruited and the finally placement process will be conducted all this things are included in human resource planning.
• Training and Development Process: Training module design, training center or location set up, employee development formulation.
• Performance Appraisal Process: Developing Employee performance evaluation system and assessing the employee’s actual performance and relative to these standards.
• Compensation and pay plan: To retain the best and talent employees the better compensation and handsome salary are planned in a well manner. The competitive advantages and pay package are designed for the employees. With this pay package the benefits are also included.
• Employee Relation and team building: The human resource departments of BBL always try to build a better employee relation as well as effective team building.
• Human resource information system: The Human resources department of BBL has a strong human resource information system (HRIS).

CAREER PLANNING AND DEVELOPMENT

The Human resource divisions of Hazrat Amanat Shah Securities Ltd. are conscious about the career development and advancement of the employees. Only HAS provides realistic job previews, conduct career-oriented performance appraisal and encourage job rotation. The human resource department of HAS focuses on career planning and development the following way:

• HAS gives more opportunity for its employees. The HRD analyze and adds more information about individual interest, preference as well as like to data.
• HAS provides career path information and adds individual growth orientation.
• HAS creates development plans and individual goal settings.
• Match individual and jobs based on a number of variables including employee’s career interests.
• Give rewards for time, productivity, talent, and so on.
• Create a most effective employee’s pay plan, lucrative benefits, easy promotional framework and ample opportunity to the employee so that the employee can easily run on his or career development as well as shape his bright future.
• The superiority of HAS with good values, fairness, potential for success, scope to development a board interesting career which really attract people to join and work with BBL.

Way to Improve Human Resource Management

With how important human resource management is to your business, you want to do everything that you can to improve your human resource management processes. Improving your human resource management processes will allow you to manage your employee’s information effectively, but it can also help you ensure that your business pays your employees accurately and on time.

Here are some ways that can improve human resource management processes.

Number one: Employee information

One of the best ways to improve your human resource management is to work on how easy it is to access your employee information. You want to choose a human resource management solution that will allow you to access your employee data anytime that you need it; you also need to have instant access to your employee payroll information. Accessing your employee information whenever you need to make a business decision is necessary to improve your human resource management processes; you also need to control your employee information. Having the best control and access over your employee information ensures that your business will work smarter, faster, and more efficiently, but only as long as authorized personnel is the only people who are accessing it. Number two: Direct Deposit

Direct deposit is a great way to help improve your human resource management processes because it helps your business to have more time. Using direct deposit will save you time because you do not have to print or sign checks, which cuts down time spent on payroll. Improving your payroll time helps improves your businesses efficiency because your payroll processing becomes faster, convenient, and more reliable.

Number three: Increase Human Resources Capabilities

I f you use an integrated human resource solution, you will help improve your human resource processes because it will allow your employees the chance to achieve their full potential. To allow this to happen you will want to create a professional development plan to focus on the requirements of the job position, but you also want to match the right candidate to the job requirements, which requires you to use an automated recruiting process.

Number four: Integrate Applications

You want to choose a human resource management solution that will integrate your payroll applications with your human resource application. Finding a human resource management solution that integrates the applications will allow you to instantly access all of your information in the system. Another benefit to integrating all of the applications is that you only have to enter the information once; only entering the information once reduces the chance of data-entry errors. Another benefit to only entering the information once is that it allows human resource managers and payroll professionals to spend more time on other projects that are more beneficial to the business. Some of the applications that you want to integrate are your general ledger, project management, and Securities & Exchange Commission reconciliation applications.

Number five: Compliance

Using a human resource management solution will help improve your business’s human resource management processes because it will ensure that you are always in compliance with government requirements. One of the biggest problems that businesses have is that even though they are familiar with the acronyms that are being used it is still hard to create the reports that are required for the government. Using human resource management software enables you to automatically track specific data to help you develop accurate government reports in a timely manner.

The functions of Human Resource Management of HAS are as follows

The functions of Human Resource Management of HAS are as follows:

• Conducting job analysis
• Planning employee needs and recruiting job candidates.
• Orienting and training new employees
• Managing wages and salaries and benefits
• Conducting evaluation of job worth
• Appraising performance
• Communicating (interview, counseling, disciplining)
• Training and developing managers

Recruitment System:

No organization can survive without a sound recruitment system in the competitive arena. A good recruitment system must be fair, transparent, time worthy, resourceful, data based, impartial and must contain the checks and balances so as to ensure smooth recruitment process across the organizations. Recruitment Systems aims to make recruiters more effective by developing, delivering and supporting the operational systems which support good recruitment practice. The legacy systems here address recruitment needs from temporary staffing to executive search across multiple industry sectors enhanced by Recruitment Systems. These help dramatically to improve the quality of recruitment across the world. As the needs of recruiters changed, so did the recruitment offerings. In many garments the recruitment database was launched and recruiters upgraded from a recruitment database to a full-function Recruitment body. As well as powerful candidate management tools, database helps recruiters build and nurture relationships with existing and potential clients. But many Securities & Exchange Commissions in Bangladesh do lack a good system of recruitment and try to dodge out the poor employee/staffs with poor pay. As Kari Marx Wrote in the Das Capital that-It is the labour is exploited by the capitalist for capital accumulation, where labours are paid very less than their production. That’s how organic composition of labour and organic composition of capital goes on where proletariats are the victim. Combining exceptional human resources and superior technologies, Recruitment Systems has developed a business strategy like no other software company in Bangladesh Securities & Exchange Commissioning sector. The products facilitate the personal and professional development of existing staff, making them into better, more effective recruiters. The Recruitment system is changing the face of human-capital management and many teams is relentless in their pursuit of new ideas, concepts and technology to ensure that customers are provided with the optimum service with goodwill, human talent and output. A good Recruitment System always looks to bring out the best in every human being. It also remains fair and transparent with impartial activities. It treats people in a fair manner without being biased. A good recruitment system is the key for success of any organization which will certainly resist cycle of “garbage in and garbage out” through proper analysis and systematic selection of good people. The finest organizations look for quality in people and train them garments of Bangladesh the selector rather the managers are not well educated and do lack manifolds in dealing the most complex, diversified human behavior. For example the TATA Company of India has its Moto as “We bring out the best in every human being.”

Finding of the study

• The general characteristics of the skill market do not exist here.
• The devastating fall down of share in 1996 has shattered the confidence of the new investors. Thus the challenges ahead for Bangladesh stock market are to revamp the share market by restoring confidence among investor.
• The stock market bubbles up but rises in the share price are not consistent with the share market fundamentals.
• The tax structure of our country is complex. Some times companies hide their real income because of sickness of industrial sector. As a result the potential investors can’t take appropriate investment decision because of hidden income.
• In our country the industrialist suffer a lot of problems. They lost their eagerness for the unequal market positions. As a result the rolling of capital decreases.
• The flow of foreign investment in our country is not satisfactory but foreign investment is essential for development of the stock market.
• For active stock market high quality of stock is essential but most of the listed companies are in bad position.
• Varity of securities are limited in market.
• Poor opportunity to portfolio investment.
• Don’t command to industrialization by DSE.

Recommendations

The following guidelines may be helpful to boost up the stock market in Bangladesh.

• Set up a training center for newly investors in the share market to reduce risk of the capital market.
• Capital Market Institute has to be setup.
• To setup financial consultation by more financial experts.
• To make the rule easy for paying the income tax.
• Influence the foreign investors by providing extra facility.
• To make the market easy for product marketing.
• To make the market active by making the industry strong.
• Strengthening the Securities and Exchange Commission.
• To make easy rule for the establishment of the industry to increase the rolling of capital market.
• To make rule so that high quality securities are bound to come to stock market.
• To provide tax benefit of the listed companies in order to encourage none listed companies to be listed with the stock exchange.
• Bringing all securities under Central Depository System (CDS) with one year.
• Enhancing Bond market through bringing in government and bonds beside the corporate bond.
• Internet based trading creating provisions for investment form any where in the world.
• Ensuring grater degree of transparency in financial discloser for better corporate governance.
• Initiating the process of creating derivative and future market.
• Create more mutual funds through capital market to proper support to wear industry.
• Government can use capital market for infrastructure and development finance source as alternative of foreign loan from World Securities & Exchange Commission, International Monetary Fund.
• Making the market competitive from regional securities market perspective through ensuring market friendly rules and regulatory framework.
• Ensure proper audit of the financial statements of the companies by the qualified Chartered Accountants.
• Ensure full discloser of the financial information of the listed companies within frequent interval.
• Make financial transaction smooth, efficient and prompt by computerization.
• Make suitable arrangements for providing custodial service by the financial institutions.
• Any sort of securities clearing and settlement time should be conduct within 2 days.
• To give the opportunity and investment facility to district people by give more membership of Stock Exchange.
• Regional Stock Exchange can be setup for efficient operation.
• Create more awareness to entrepreneur for understanding the greater benefit of capital market.
• All Multinational Companies has to be introduced their shares in capital market.
• Government have to offload shares of govt. own company.

The role of Hazrat Amanat Shah Securities Ltd. has been remarkable from the beginning when it was started its business. Now a large number of clients HAS consist.

The role of Dhaka Stock Exchange has been remarkable in recent years. It has gained the confidence of public and is able to attract more and more funds.

The DSE has been able to attract a sufficient volume of public, institute, NRB and foreign investors is growing day by day and market performance of DSE as Market capitalization, market turnover increasing remarkable. If this trend continues DSE market will be efficient one in the near future. At the end of the year 2010 DSE is expected to become one of the major stock market in this region.;

So far we have observed that DSE has suffered from ups and downs and it can be attributed to the efficiently of the members and some of the consistent policies of the Government with more experience. In the coming year in dealing with such busy capital market both the DSE members and government policy makers are expected to be more consistent in their practices and policies. Their product role in the future will certainly be a major factor in the performance of Dhaka Stock Exchange market.

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