Regulations of Stock Exchanges I Securities and Exchange Commission. In mixed economies like Bangladesh, the major part of domestic savings takes place in the private sector. The domestic saving rate is positively related to the level of income and its growth rate. To raise the saving rate one must understand the savings preferences and motives of the non- corporate sector of the country. Economic history of some developing countries suggests that, in the evolution of the financial structure, the non-corporate sector prefers to hold more than fifty per cent of its financial saving in the form of saving and fixed deposits.Regulations of Stock Exchanges I Securities and Exchange Commission.
Securities markets in Bangladesh were established in 1954 while the formal trading began in 1956. Their activities are being controlled and regulated by their Article of Association along with other government regulations subject to amendment from time to time. The Capital Issue Act, 1954, however, is one of the pieces of legislation governing the stock exchange in the country. Consequently upon, with the spirit of the nationalization and socialization motive of the government, the then only securities market in Bangladesh, the Dhaka Stock Exchange Ltd. suspended its trading and other administrative activities in 1971 after the independence of the country. Later on in 1976 it resumed its activities with nine listed companies after the changes of the government policies. Activities of the securities markets improved since 1985 and gained momentum from early 1991
Efficient and effective operation of securities market is required to meet at least two basic requirements. First one is to support industrialization through savings mobilization, investment fund allocation and maturity transformation. Second one is to be safety and efficiency in discharging the above role. In a developing country like Bangladesh such conditions do not prevail due to the prevalence of informal credit markets. The recent development towards privatization seeks the need of efficient capital markets. It performs various functions in the process of economic development. In economic development of a country like Bangladesh, the practices, and the supervision of issuers, market and intermediaries are vested upon regulatory authority. The Board of SEC is the policy-making and overseeing body and the regulatory functions are taken care of by Chairman and members.
All the components of securities markets should be concerned with the investor protection. It is essential to say that the legal protection of investors in a country is an important determinant of the development of its financial markets. Where laws are protective of outside investors and enforced, investors are willing to finance firms, and financial markets are both boarder and more valuable. Keeping this view in mind, the government of Bangladesh has set up Securities and Exchange Commission (henceforth SEC) on June 8, 1993 under the Securities and Exchange Commission Act, 1993. Securities and Exchange Commission is an independent, quasi-judicial agency of the government, the mission of which is to administer laws in the securities field and to protect investors and the public in securities transactions. Consistent with the over all policies, SEC is supposed to act as a central regulatory agency performing wide range of functions covering the entire capital market including the proper issue of capital, the establishment of fair trading.
Regulations of Stock Exchanges I Securities and Exchange Commission