Areas of Legal Coverage of SEC

Areas of Legal Coverage of SEC.

The Securities and Exchange Commission was established under the Securities and Exchange Commission Act, 1993 to protect the interest of the investors in securities markets.

Areas of Legal Coverage of SEC

Under the Act, Rules, and Regulation thereunder, the Commission is supposed to perform the following functions:
i) to ensure the issuance of securities properly.
ii) to promote and regulate the Bangladesh capital markets.
iii) to regulate the activities of the stock exchanges.
iv) to register and regulate the activities of intermediaries like stock brokers/dealers, underwriters who are associated with the securities markets.
v) to monitor the activities of any collective scheme like mutual funds.
vi) to monitor the functions of all authorized self-regulatory organizations in the securities markets.
vii) to prohibit fraudulent and unfair activities in the securities markets.
viii) to prohibit insider trading in securities.
ix) to introduce and promote investor education and training regarding the securities markets.
x) to conduct research and publication focusing on different aspects of securities markets.
xi) to regulate the substantial acquisition of shares or stocks and take-over the companies.

Besides the above functions, the Commission is assigned to call for information, undertake investigation and inspection, conduct inquiries and audit of any issuer or dealer of securities, the exchange and intermediaries and self-regulatory organizations in the securities markets.

Thus, the work and strategies of the Commission are to protect investors, facilitate capital formation and inhibit fraud in the public offerings of securities.

There are different Departments of SEC to perform the above functions. Being one of the Departments, Corporate Finance performs specific functions as:
a) raising of capital through initial public offerings (IPOs) and other forms of equity debts.
b) supervising the functions of the stock exchanges.
c) regulating the listed companies and corporate disclosure.
d) regulating and disclosing the interest of directors, officers, and major shareholders.
e) monitoring and supervising the utilization of funds procured through public issues and the right issues.
f) making policies for share-repurchase and stock-splits.

Legal Services Department of the Commission performs the following functions:
a) to interpret laws, rules, orders, and regulations.
b) to prosecute against the violators of the provisions Acts, Rules and Regulations.
c) to file cases against the accused persons and firms listed with the exchanges.