STOCK MARKET CAPITAL IN BANGLADESH: IMPROVING THE

LEGAL FRAMEWORK ON THE BASIS OF THE UK EXPERIENCE

MD. QUAZI SIFAT

INTRODUCTION

Stock markets or Stock exchanges play an important role in the modern capitalized economy by
providing the strength to nation's economic infrastructure. Now the stock market is one of the most
important sources for companies to raise capital. Stock market allows businesses to raise additional
capital for expansion by transferring the ownership of the company. It provides individuals the
opportunity to invest in corporations.1 The size of the world stock market was estimated at about
$36.6 trillion at the beginning of October 2008.2

In Bangladesh, there are two stock exchanges, the Dhaka Stock Exchange (DSE) and the Chittagong
Stock Exchange (CSE), DSE was setup on April 28, 1954 that started formal trading in 1956. In 1995,
CSE was setup.3

However, in its fifty-eight years history the stock market of Bangladesh crashed two times, first in
1996 and then in 2011. At first, the market crashed in December of 1996 and the index started to
decline significantly since then resulting in a cumulative decline of 83.44 percent from 1996 to 1999
with the annual rate of 27.82 percent.4Stock index of Bangladesh, which has dropped 55% since early
2011, continues to fall. 5 One of the main reasons behind this unstable stock market is the lacuna in the
regulatory frameworks and weakness in stock market governance. In this situation, sustainable
improvement of the legal framework of the stock market is a vital issue for the protection of the
investors and the development of its economy.

Md Mahmudul Alam et al, Effect of Policy Reforms on Market Efficiency: Evidence from Dhaka Stock Exchange (Research
Article No 864940, Economics Research International, Hindawi Publishing Corporation, 2011) 1.
Seeking Alpha , World Equity Market Declines: -$25.9 Trillion (8 October 2008)
< http://seekingalpha.com/article/99256-world-equity-market-declines-25-9-trillion >.
3
M Khokan Bepari and Abu Mollik BANGLADESH STOCK MARKET GROWING?
KEY INDICATORS BASED
ASSESSMENT (14 June 2012) <www.atu.edu/business/jbao/Fall2008/Bepari,%20Mollik.doc>.
4
A T Mollik and Md Khokan Bepari, Weak-Form Market Efficiency of Dhaka Stock Exchange (DSE), Bangladesh (Paper
presented at 22nd Australasian Finance and Banking Conference , 24 August 2009) <http://ssrn.com/abstract=1460536>.
5
Neel Chowdhury, The Rise and Fall of One of the World's Worst-Performing Stock Markets, The Time (online), 2 February
2012, <http://www.time.com/time/world/article/0,8599,2105845,00.html#ixzz21j1e5A6X>.
2

7|Page

The Research Questions

The present study has attempted to find out answers of the following questions:
1. What are the key features of stock market in Bangladesh?
2. What are the legal frameworks of the market?
3. What are the relevant mechanisms of stock market in the UK?
4. What are the limitations in the regulations of stock market in Bangladesh?
5. Finally, how can the regulatory frameworks of the UK stock market be cooperative for
improving the legal framework of stock market in Bangladesh?

Aim and Objective of the Study

The study aims to analyze basic structure and the key securities laws of Bangladesh, compare these
Bangladeshi regulations with security market related laws in the UK, to address the limitation of the
market and the regulations, and to suggest certain recommendations, based on the UKs legislations
for the improvement of the legal framework of stock market in Bangladesh.

Rationale of the Study

Due to recent instability in the stock market of Bangladesh, improvement of legal framework is
necessary for the proper function of the market. During the study, some basic features of the market
will be compared with the stock market of the UK, one of the strongest stock market of the world.
Therefore, the rationale of taking this study is to propose some recommendations on the basis of the
stock market of the UK.

Methodology

The study is based on a qualitative survey research. Though both primary and secondary data are used
in the study, it is mainly based on secondary data. The study prefers comparative approach, makes a
comparison between the security market related laws in Bangladesh with those of UK, and tries to
present certain recommendations by improving legal framework to provide better atmosphere in the
stock market of Bangladesh.

8|Page

Scope and Limitation of the Study

The present study tries to address the obstacles that hamper the growth of stock market in Bangladesh
and to discuss about the ways of improvement as well as to look up the legal mechanisms of stock
market of Bangladesh and the UK. Finally, it tries to improve the legal framework of the stock market
of Bangladesh within the context of the present market structure and the regulations the UK.

To do the study it was realised that, the books and publications relating to regulatory framework of
stock market of Bangladesh are rare and are not easily assessable. Moreover, the data used in these
sources are not properly updated although stock market related regulations are changing almost every
day.

Regulating the stock market is a complicated process. There are a number of regulations for the
governing of the stock markets of Bangladesh. Due to limitation of time, this study focuses only the
key features and relevant regulations of the market. This study tries to limit its scope on the
regulations which govern the stock markets, the market regulators, stock exchanges, bond markets,
OTC markets, trading system of stock markets of Bangladesh and the UK. It tries to focus on the
regulations relevant to issue of prospectus, issue of capital, market efficiency and disclosure of
financial statements, prohibition of insider trading and market manipulation, and to the protection of
investors of the two markets as well as the codes and guidelines of two markets.

Overview of the Study

The remainder of the research proceeds as follows. Chapter II deals with some conceptual discussion
about the stock market, stock market capital, relationship between stock market and economic growth
and necessity of good regulations for the market. Chapter III compares the key features of the stock
market of Bangladesh with the relevant features of the stock market of the UK. Chapter IV finds out
the problems in stock market and the lacking in the securities laws of Bangladesh. Chapter V proposes
recommendations, within the contexts of the UK stock market, that might be considered for the
sustainable development of the stock market and conclusions are drawn in Chapter VI.

9|Page

II STOCK MARKET: ITS CAPITAL AND REGULATORY FRAMEWORKS

A Stock Market
A stock market is a public body for the trading of companies stock or shares and derivatives at an
agreed price. The stocks are listed and traded on stock exchanges which are entities of a corporation.
The purpose of a stock exchange is to facilitate the exchange of securities between buyers and sellers,
thus providing a marketplace. The exchanges provide real-time trading information on the listed
securities, facilitating price discovery. Persons involving in trading in stock markets are called market
participants who include individual retail investors, institutional investors such as mutual funds, banks
and insurance companies, and publicly traded corporations trading in their own shares.6

B Stock Market Capital

Capital refers to the funds provided by owner and lenders to businesses to run the business for
producing goods or services. Capital is synonymous with the net assets or equity of the entity.7 When
a company finances itself by issuing capital to the investors through the stock market it is called stock
market capital. Companies may issue shares, debentures, bonds etc. to collect capital from stock
markets.

Share

A share is a single unit of ownership in a corporation, mutual fund, or any other organization. A share
is the smallest unit of ownership. 8 A joint stock company divides its capital into shares, which are
offered for sale to raise capital, termed as issuing shares. Thus, a share is an indivisible unit of capital
of a company. The income received from shares is known as a dividend. A shareholder, also known as
a stockholder, is a person who owns shares of a certain company or organization, and is thus a part
owner of the company. 9 The Companies Act 1994 of Bangladesh describes "share" as a share in the

Wikipedia, Stock market (12 June 2012) < http://en.wikipedia.org/wiki/Stock_market>.

Wikipedia, Financial capital (12 June 2012) <http://en.wikipedia.org/wiki/Financial_capital>.
8
THEFREEDICTIONARY, Share (12 June 2012)< http://financial-dictionary.thefreedictionary.com/share>.
9
Wikipedia, Share (finance) (12 June 2012) <http://en.wikipedia.org/wiki/Share_(finance)>.

10 | P a g e

capital of the company, and includes stock except when a distinction between stock and shares is
expressed or implied.10

Debentures

A debenture is a document that either creates a debt or acknowledges it, and it is a debt without
collateral. In corporate finance, the term is used for a medium- to long-term debt instrument used by
large companies to borrow money. A debenture is thus like a certificate of loan or a loan bond
evidencing the fact that the company is liable to pay a specified amount with interest and although the
money raised by the debentures becomes a part of the company's capital structure, it does not
become share capital. The interest paid to them is a charge against profit in the company's financial
statements.11 As per the Companies Act 1994 of Bangladesh "debenture" includes debenture stock,
bonds and any other securities of a company, whether constituting a charge on the assets of company
or not. 12

Bond

A corporate bond or bond is a negotiable certificate that acknowledges the indebtedness of the bond
issuer or the corporation to the holder. It is a debt security, in which the authorized issuer owes the
holders a debt and, depending on the terms of the bond, is obliged to pay the coupon to use and/or to
repay the principal later, termed maturity. The issuer has to repay the nominal amount on the Maturity
date. As long as all payments have been made, the issuer has no more obligations to the bondholders
after the maturity date. The coupon is the interest rate that the issuer pays to the bondholders. Usually
this rate is fixed throughout the life of the bond.13

Stock Market and Economic Growth

Raising capital through the stock market certainly plays a vital role in nations economy. One of the
most enduring issues in economics is whether financial development causes economic growth or
whether it is a consequence of increased economic activity. Efficient markets will reflect future
earnings growth in current prices. Since earnings growth should be closely related to overall economic

10

Companies Act 1994 (Bangladesh) s 2(v).

Wikipedia, Debenture (12 June 2012) <http://en.wikipedia.org/wiki/debenture)>.
12
Companies Act (Bangladesh) s 2(e).
13
Wikipedia, Bond (finance) (12 June 2012) <http://en.wikipedia.org/wiki/Bond_(finance)>.
11

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growth, this will make it look like increases in market capitalization there is a positive relation
between market capitalization and future economic growth.14

Necessity of Good Market Regulations

In an increasingly integrated global economy, good capital market regulation is on the rise. Capital
market or stock market regulations and their enforcement might affect a wide range of market
performance measures.15 Improvements in these CMG (capital market governance) variables lead to
decreases in the cost of capital, increases in market liquidity, and increases in market pricing
efficiency. 16 Bad security laws result in lower market pricing efficiency. Investors associate bad
capital market governance with increased risk.17 Therefore to protect the investment of investors in a
stoke marker and for the welfare of the economy of a nation proper regulatory frameworks must be
confirmed.

III KEY FEATURES OF STOCK MARKET OF BANGLADESH: A COMPARISON

WITH THE STOCK MARKET OF THE UK

Development of the stock market and the strong market structures purely depend upon the good
market regulations. Therefore, effective market regulations are required for a strong stock market. In
this segment, this study will focus some key features of stock market of Bangladesh and related
regulatory frameworks and make a comparison with the stock market of the UK which is , one of the
strongest stock markets of the world.

A Key Regulatory Frameworks

1

Securities Laws of Bangladesh

Functioning of stock market is a complicated matter. There are a number of laws, rules and
regulations which controls the functions of a stock market. In Bangladesh, the basic statues for the
controlling of the listed companies in stock market are
14

See Randall K Filer, Jan Hanousek and Nauro F Campos, Do Stock Markets Promote Economic Growth?(Working Paper No
267, Center for Economic Research and Graduate Education - Economic Institute, Prague, September 1999).
15
Hazem Daouk, Charles M C Lee and David T Ng, Capital Market Governance: How Do Security Laws Affect Market
Performance?(Working Paper No 2005-08, Department of Applied Economics and Management, Cornell University, Ithaca, New
York 14853-7801 USA, April 2005) 2.
16
Ibid 26.
17
Ibid.

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Securities and Exchange Rules 1987

The Securities and Exchange Commission Act 1993

Companies Act 1994

Depository Act 1999

Securities and Exchange Commission (Prohibition of Insider Trading) Rules 1995

Securities and Exchange Commission (Issue of Capital) Rules, 2001

Securities and Exchange Commission (Asset Backed Security Issue) Rules, 2004

Securities and Exchange Commission (Rights Issue) Rules, 2006

Securities and Exchange Ordinance 1969 (SEO)

Securities and Exchange Commission (Public Issue) Rules, 2006

Dhaka Stock Exchange /Chittagong Stock Exchange (Direct Listing) Regulations 2006
Listing Regulations of the Dhaka Stock Exchange /Chittagong Stock Exchange Limited 1996

Position of the UK

In UK, the basic regulation regarding stock market is the FSMA 2000 under which the FSA was
established. However, the listed companies must fulfil the obligation of the Companies Act 2006.
Therefore in the UK the basic regulatory frameworks of relating to stock market are

Financial Service Markets Act 2000 (FSMA)

Financial Services and Markets Act 2000 (Market Abuse) Regulations 2005
Prospectus Regulations 2005

Companies Act 2006

To fulfil the role as a securities regulator the FSA has made and enforces the FSA Handbook
which includes

FSA Listing Rules,

FSA Disclosure and Transparency Rules (DTR) and

FSA Prospectus Rules,

Market Conduct (MAR)

As a member of the European Union (EU), the UK has to comply with the obligations of the
EU. The most important regulations of the EU regarding financial markets are

Directive 2003/6/EC of the European Parliament and of the Council of 28 January

2003 on insider dealing and market manipulation (Market Abuse)(The Market Abuse
Directive);

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Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003
on the prospectus to be published when securities are offered to the public or admitted to
trading on a regulated market and amending Directive 2001/34/EC (The Prospectus
Directive);
Regulation (EC) No 809/2004 of 29 April 2004 of the European Parliament and of the
Council implementing Directive 2003/71/EC (The PD Regulation);
Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004
on the harmonisation of transparency requirements in relation to information about issuers
whose securities are admitted to trading on a regulated market and amending Directive
2001/34/EC (The Transparency Obligations Directive); and
Directive 2010/73/EU of the European Parliament and of the Council of 24 November 2010
amending Directives 2003/71/EC on the prospectus to be published when securities are
offered to the public or admitted to trading and 2004/109/EC on the harmonisation of
transparency requirements in relation to information about issuers whose securities are
admitted to trading on a regulated market ( The Prospectus Directive Amending Directive).

B Regulatory Authorities

Securities and Exchange Commission of Bangladesh

In Bangladesh, In order to control operation of the stock exchanges and trading of stocks of listed
companies, the government of Bangladesh established the Securities and Exchange Commission
(SEC) of Bangladesh on 8 June 1993 under the Securities and Exchange Commission Act, 1993. 18
Prior to its establishment, the market was regulated under the Capital Issues Act 1947.19 The SEC
was established with the following mission:
Protecting the interest of investors in securities;
Developing the capital and securities markets; and
Framing of securities rules concerning above. 20

18

Securities and Exchange Commission of Bangladesh, Annual Report 2010-11, 12.

BANGLAPEDIA, Securities and Exchange Commission (9 August 2012)
<http://www.banglapedia.org/httpdocs/HT/S_0175.HTM>.
20
Securities and Exchange Commission, above n 18, 11.
19

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UK Financial Services Authority

The Financial Services Authority (FSA) is an independent non-governmental body, given statutory
powers by the Financial Services and Markets Act 2000(FSMA). The FSA was established under the
FSMA 200021. FSA is the main responsible for regulating financial services in the UK. FSA regulate
most financial services markets, exchanges and firms. It sets the standards that they must meet and
can take action against firms if they fail to meet the required standards. FSMA 2000 sets out four
statutory objectives of FSA22 that are
1. market confidence,
2. financial stability ,
3. consumer protection and
4. the reduction of financial crime. 23

The FSA, when it acts as the competent authority under Part VI of FSMA 2000, is referred to as the
UK Listing Authority (UKLA). In this role, the FSA is a securities regulator, focused on the
companies which issue the securities traded in financial markets of the UK.
ascertains the duty of UKLA.

24

The FSMA 2000

25

C Stock Exchanges

In Bangladesh, there are two stock exchanges. The Dhaka Stock Exchange (DSE) was promoted as
the East Pakistan Stock Exchange Association Ltd in 1954. On 14 May 1964 the name of East
Pakistan Stock Exchange Limited was changed to Dhaka Stock Exchange Ltd (DSE).

26

The

Chittagong Stock Exchange (CSE) began its journey in 10th October of 1995 from Chittagong City. 27
The activities of the DSE and the CSE are regulated under the Securities and Exchange Ordinance
1969, the Companies Act 1994 and the Securities & Exchange Commission Act 1993. As on 30 June
2011 total number of listings in DSE was 490 against which issued capital was Tk. 80683.90 crore
and the market capitalization was Tk. 285389.22 crore.28On the other hand, there are 135 members in
CSE of which 120 members are registered by the Commission for conducting securities business. As
on June 30, 2011 total number of securities in CSE was 215 against which issued capital was Tk.

21

Financial Services and Markets Act 2000 (UK) c 8, s 1.

Ibid s 2.
23
FSA, Statutory objectives (9 August 2012) < http://www.fsa.gov.uk/about/aims/statutory>.
24
FSA, UK Listing Authority (9 August 2012)< http://www.fsa.gov.uk/doing/ukla>.
25
FSMA s 73(1).
26
Dhaka Stock Exchange Ltd, Introduction to DSE (9 August 2012) <http://www.dsebd.org/ilf.php>.
27
Chittagong Stock Exchange Ltd, Background (9 August 2012)<http://www.cse.com.bd/mission.php#bg>.
28
Securities and Exchange Commission, above n 18, 12.
22

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20677.39 crore and market capitalization was Tk. 225978.00 crore.29 The stock market in Bangladesh
seems to be emerging markets.30 While in 2000 the market capitalization was only around 2.24% of
the countrys GDP, at the end of June 2011 it stood around 41.22%.31

In the UK, the London Stock exchange (LSE) was founded as The UK Royal Exchange in 1571. The
LSE is the fourth-largest stock exchange in the world and it had a market capitalisation of
US$3.266 trillion in December 2011. The LSE runs two separate markets, namely the Main Market
and the Alternative Investment Market (AIM) for well- established and less well-established
companies respectively. AIM replaced the Unlisted Securities Market (USM) in 1995. Carrying on the
business of operating a stock market is regulated under the Financial Service Markets Act 2000
(FSMA).32 AIM is for the London Stock Exchanges international market for smaller growing
companies. The AIM falls within the classification of a Multilateral Trading Facility (MTF) in 2004,
and such is a flexible market with a simpler admission process for companies wanting to be publicly
listed. 33

D Bond Markets

Bonds are source of debt financing. In which the issuance and trading of debt securities occurs. The
bond market primarily includes government-issued securities and corporate debt securities.34

Bond Market in Bangladesh

The capital market of Bangladesh is predominantly an equity based securities market. Number of
bonds and other debt instruments are insignificant. In order to popularize the government bond and to
increase the depth of market, trading of government treasury bonds have been introduced in stock
exchanges with effect from 1 January 2005. As on 30 June 2011, 212 government treasury bonds, 3
corporate bond, 8 debentures were listed in DSE whose market capitalization was Tk 39401.30 crore.
In Bangladesh, bonds are not yet popular.35

29

Ibid 12.
Asma Mobarek, A Sabur Mollah and Rafiqul Bhuyan, Market Efficiency in Emerging Stock Market: Evidence from Bangladesh
(2008) 7 (17) Journal of Emerging Market Finance 18, 38.
31
Securities and Exchange Commission, above n 18, 14.
32
Paul Lyndon Davies, Gower and Davies' Principles of Modern Company Law (Sweet & Maxwell, 8th ed, 2008) 856 nn 25-5.
33
Wikipedia, London Stock Exchange (9 August 2012) <http://en.wikipedia.org/wiki/London_Stock_Exchange>.
34
INVESTOPEDIA, Definition of 'Bond Market' (12 August 2012)
<http://www.investopedia.com/terms/b/bondmarket.asp#ixzz25y52M82X>
35
Securities and Exchange Commission, above n 18, 13.
30

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Bond Markets in the UK

The bond markets are a core sector of the capital markets in the UK and the rest of the EU. Bonds are
the key form of medium and long term financing for governments and, alongside equity, a major
financing tool for the private sector. The UK bond markets can be divided into three main divisions:

the UK government securities market (the gilt market),

the domestic corporate bond market, and

the international bond market .36

However, the London Stock Exchange opened the Professional Securities Market (PSM) that enables
domestic and foreign companies to raise capital through the listing of specialist securities, including
debt and depositary receipts, to professional investors. Companies wanting to raise capital, without
being restricted in the type or value of securities they issue, may do so without the additional cost. At
June 2010, Total Number of Securities Listed in the PSM was 488.37

Over -the- Counter Market

Securities, which are outside the stock exchanges, may be traded without intermediaries through
mutual understanding in the OTC market. Securities de-listed from the exchanges and securities not
listed with the exchanges but issued obtaining consent from the regulatory authority can be traded in
the OTC market.

OTC Market in Bangladesh

Under the Securities and Exchange Commission (Over-the-Counter) Rules 2001, OTC market was
established in CSE. Dhaka Stock Exchanges Ltd started OTC market in line with the direction of the
Commission on 6 September 2009. There are 68 listed companies are trading in DSE OTC market as
on 30 June 2011.38 . The transaction of any security shall be done only by the registered stock dealer
or broker, and the exchange prominently discloses the security available in the OTC market.39
36

See Financial Services Authority, Trading transparency in the UK secondary bond markets (Discussion Paper No 05/5, UK
Financial Services Authority, September 2005) < http://www.fsa.gov.uk/pubs/discussion/dp05_05.pdf >.
37
London Stock Exchange, Professional Securities Market (1 Sept 2012) <http://www.londonstockexchange.com/companies-andadvisors/psm/home/psm.htm>.
38
Securities and Exchange Commission, above n 18, 12.
39
Alam et al, above n 1, 3.

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UK OTC Derivative Markets

The importance of OTC markets to the UK economy is remarkable. In a survey, it was found that,
43% of the global OTC market is located in the UK.40 In the UK, the HM Treasury and the FSA
proposed that measures need to be developed to address systemic shortcomings in OTC derivative
markets which included greater standardisation of OTC derivatives contracts, Consistent and high
global standards for Central Counterparties, Greater transparency of OTC trades to the market. The
FSA has also been working as a member of the Committee on Payment and Settlement Systems and
the International Organisation of Securities Commissions (CPSS-IOSCO) to review existing standards
for CCPs in order to better address risks associated with clearing OTC derivatives.41

Depositary System

A depositary system for securities records ownership of dematerialised securities, i.e., those securities
that can be held without evidence of ownership in the form of certificates and its Ownership is usually
instead recorded in a depositary.
1

Central Depository System of Bangladesh

The Central Depository Bangladesh Limited (CDBL) was established in August 2000 to operate and
maintain the Central Depository System (CDS) of Electronic Book entry, recording and maintaining
securities accounts and registering transfers of securities. Another purpose of CDS is to change the
ownership without any physical movement or endorsement of certificates and execution of transfer
instruments. It also provides various other investor services including providing a platform for the
secondary market trading of Treasury Bills and Government Bonds issued by the Bangladesh Bank.
CDBL went live with the Electronic Treasury Bills registry of Bangladesh Bank on 20th October,
2003 and thereafter started equity market operations on 24th January, 2004.42

40

Financial Services Authority and HM Treasury, Reforming OTC Derivative Markets: A UK perspective (Report, Financial
Services Authority and HM Treasury, December 2009), 5 < http://www.fsa.gov.uk/pubs/other/reform_otc_derivatives.pdf>.
41
Ibid 7.
42
Mollik and Bepari , above n 4.

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Central Securities Depository of the UK

Euroclear UK & Ireland is the Central Securities Depository (CSD) of the United Kingdom and
Ireland. It is a part of the Euroclear group that operates in many countries. It provide securities
settlement facilities for corporate and government securities, including those traded on the London
and Irish Stock Exchanges. Euroclear UK & Ireland is regulated by the FSA. Euroclear UK & Ireland
operates the CREST system. 43 The CREST system offers retail investors the opportunity of holding
their securities in electronic form. The design of the CREST system began in 1993 and in 1994
CRESTCo Limited (now Euroclear UK & Ireland Limited) was formed to build, own and operate the
new settlement system. The CREST system operates from 15 July 1996, providing the UK and Irish
markets delivery versus payment dematerialised settlement system. 44

G Prospectus Disclosure Requirements for Issuing Capital

A formal legal document, which is required by and filed with the regulators of the securities,
that provides details about an investment offering for sale to the public. A prospectus should contain
the facts that an investor needs to make an informed investment decision. It is also known as offer
Document. It contains background information of company including such details as the exact
number of shares certificates issued and the precise offering price, its objectives, investment
strategies, risks, performance, distribution policy, fees and expenses etc.45

Prospectus Disclosure in Bangladesh

In Bangladesh, the mandatory information that must be contained in the prospectus is mentioned in
the Securities and Exchange Commission (Public Issue) Rules 2006. Prospectus means any
document prepared for the purpose of communicating to the general public a companys plan to offer
for sale of its securities under these Rules. 46

(a) Publication of Prospectus and Delivery Requirements

The abridged version of the prospectus, as approved by the Commission, shall be published by the
issuer in four national daily newspapers (in two Bengali and two English). The full prospectus shall be
43

Euroclear UK & Ireland, About Euroclear UK & Ireland (5 September

2012)<https://www.euroclear.com/site/public/EUI/!ut/p/c5/04_SB8K8xLLM9MSSzPy8xBz9CP0os3gz08BgH3MPIwN3X3dTAy
M_Y38vAxdnY3dXI_1wkA7cKnzNIfIGOICjgb6fR35uqn5Bdnaao6OiIgDVTa5G/dl3/d3/L2dJQSEvUUt3QS9ZQnZ3LzZfNjVRU
0w3SDIwOFZMODAyVEFQOVRPRDAwSjM!/>.
44
London Security Plc <http://www.londonsecurity.org/faqs.php>.
45
INVESTOPEDIA, Prospectus (12 June 2012) < http://www.investopedia.com/terms/p/prospectus.asp#axzz25or3qLcZ>.
46
Securities and Exchange Commission (Public Issue) Rules 2006 (Bangladesh) r 2.

19 | P a g e

posted on website of the SEC, stock exchanges, issuer and the issue manager.47 Sufficient copies of
prospectus shall be made available by the issuer so that any person requesting a copy may receive
one. 48

(b) Format and Contents of the Prospectus49

It must contain the following information:

all Material Information necessary to enable investors to make an informed assessment of the
business engaged in, or to be engaged in, by the company, separate full disclosure for each

project;
Risk Factors and Managements Perception
Description of business and property;
Plan of Operation and Discussion of Financial Condition;
Information in respect of its directors and officers;
Involvement of Directors and Officers in Certain Legal Proceedings if they have occurred
during the last ten years;
description of Certain transaction during the last two years;
Executive Compensation;
Information in respect of any option held by each director, the salaried officers, a n d all other
officers as a group;
Transaction with the Directors and Subscribers to the Memorandum;
Tangible assets per share;
Ownership of the Companys Securities;
Determination of Offering Price;
Market for the Securities Being Offered;
Description of Securities Outstanding or Being Offered;
Debt Securities;
Financial Statement Requirements etc.

(c) Liability for Improper Disclosure

As per the Securities and Exchange Ordinance 1969 any person who participates in any act or
transaction omit to state or actively conceal a fact having knowledge or belief of such fact shall be
liable to any person who has purchased or sold a security in reliance on such act or transaction for
47
48
49

Ibid r 5.
Ibid r 6.
Ibid r 8.

20 | P a g e

damages caused by such reliance, without regard to the presence or absence of any contractual
relationship between the two.50 Whoever omits to state or actively conceal a fact having knowledge or
belief of such fact shall be punishable with imprisonment for a term which may extend to five years,
or with fine which may extend to five lakh Taka or with both.51

Mandatory Prospectus relating Obligation in the UK

In the UK, the prospectus of a issuer of company must fulfil the conditions laid down in the FSA
Prospectus Rules.
(a) Format of Prospectus
A prospectus may be drawn up as a single document or separate documents.52 A prospectus composed
of separate documents must divide the required information into
1. A registration document containing the information relating to the issuer(Annex II of the
Prospective Directive);
2. A securities note containing the information concerning the transferable securities to be
offered or to be admitted to trading(Annex III of the Prospective Directive); and
3. A summary (Annex IV of the Prospective Directive).53

(b) Minimum information to be included in a prospectus

Articles 3 to 23 of the PD Regulations provide for the minimum information to be included in a
prospectus.54 The Annexes of the Prospectus Rule referred to in these articles are set out for
information in. As per ANNEX I minimum disclosure requirements for the share registration
document are:

All persons responsible for the information given in the Registration Document,
A declaration by those responsible for the registration document that the information
contained in the registration document is true to the best of their knowledge;

50

Securities and Exchange Ordinance 1969 (Bangladesh) s 23(3).

Ibid s 24.
52
FSA Prospectus Rules (UK) r 2.2.1.
53
Ibid r 2.2.2.
54
Ibid r 2.3.
51

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Names and addresses of the issuer's auditors for the period covered by the historical financial
information (If auditors have resigned, been removed or not been re-appointed) together with

their membership in a professional body;

Information about the issuer company;

If the issuer is part of a group, a brief description of the group,

Operating and financial review;

Risk factors;

Business overview;

Property, plants and equipment;

Capital resources;

sponsored research and development activities;

Profit forecasts or estimates;

Research and development, patents and licences including the amount spent on issuer-

Trend information;

Administrative, Management, and Supervisory Bodies and Senior Management;

The amount of remuneration paid and benefits in kind granted to such persons by the issuer
and its subsidiaries for services in all capacities to the issuer and its subsidiaries by any

person;

Board practices including s issuers audit committee and remuneration committee;

corporate governance regime;

Major shareholders;

by the historical financial information and up to the date of the registration document;

report in respect of each year;

A statement as to whether or not the issuer complies with its country's of incorporation

Employees including Shareholdings and stock options;

Details of related party transactions that the issuer has entered into during the period covered

Audited historical financial information covering the latest 3 financial years and the audit

Additional information including number of authorised, issued share etc;

of business;

A summary of each material contract, other than contracts entered into in the ordinary course

The memorandum and articles of association of the issuer and an indication of where the
documents on display may be inspected, by physical or electronic means.

(c) Method of Publication

A prospectus is deemed to be made available to the public for the purposes
22 | P a g e

1.

by insertion in one or more newspapers circulated the EEA States in which the offer is made
or the admission to trading is sought;

2.

in a printed form to be made available, free of charge, to the public at the offices of the
regulated market;

3.

in electronic form on the issuer's website; and

4.

in an electronic form on the website of the regulated market.55

(d) Advertisements
An advertisement relating to an offer or to an admission to trading must state that

a prospectus has been or will be published and indicates where investors are, or will be, able to
obtain it;
it is clearly recognisable as an advertisement;
information in the advertisement is not inaccurate, or misleading;
information in the advertisement is consistent with the information contained in the prospectus, if
already published, or with the information required to be in the prospectus, if the prospectus is
published afterwards.56

(e) Liability
As per the FSMA 2000, Any person responsible for listing particulars is liable to pay compensation to
a person who has acquired securities to which the particulars apply; and suffered loss in respect of
them as a result of any untrue or misleading statement in the particulars required to be included as
general or Supplementary listing particulars. Similarly a person suffered loss due to failure to publish
a required supplementary prospectus may also sue, 57
A person liable for misleading, false or deceptive in a material particular in prospectus is liable of an
offence on summary conviction, to imprisonment for a term not exceeding six months or a fine not

55
56
57

FSA Prospectus Rules r 3.2.4.

Ibid r 3.3.2.
FSMA s 90(1).

23 | P a g e

exceeding the statutory maximum, or both; on conviction on indictment, to imprisonment for a term
not exceeding seven years or a fine, or both.58

H Listing and Issue of Capital

1

Ways of Raising Capital in Bangladesh

As per the Securities and Exchange Ordinance 1969, the consent or recognition of the Commission
must be taken before issue of capital. An issuer who intends to get any of his securities listed on a
Stock Exchange shall submit an application to the Stock Exchange and submit a copy of the
application to the Commission.59 The issuer must fulfil the conditions laid down in the SEC (Issue of

Capital) Rules2001. In Bangladesh, securities of the issuer companies may be issued in the following
ways:
(a) Initial Public Offering
Initial public offering (IPO) means first offering of security by an issuer to the general public. 60
Listing through IPO is regulated by the Securities and Exchange Commission (Public Issue) Rules
2006. financial statements of the issuer must be prepared as per IAS as applicable in Bangladesh, and
audited as per ISA as applicable in Bangladesh.61 Upon receiving the consent of the SEC to issue
capital through IPO, the abridged version of the prospectus shall be published by the issuer in four
national daily newspapers.62
(b) Book building Method
Book-building method means the process by which an issuer attempts to determine the price to offer
its security based on demand from institutional investors.63 Unless IPO, the price is not determined by
the issuer company rather it is fixed by the bidder where the Issuer invites for indicative price offer
from the eligible institutional investors through proper disclosure, presentation, document, seminar,
road show. 64

58

Ibid s 397.
Securities and Exchange Ordinance s 9(1).
60
Securities and Exchange Commission (Public Issue) Rules 2006 (Bangladesh) r 2(j).
61
Ibid 4(7).
62
Ibid r 5.
63
Ibid r 2(d).
64
Ibid r 8.

59

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(c) Direct Listing

Direct listing of securities indicates that the securities of the issuer company will be listed directly in
a stock market. In Bangladesh, the Dhaka/Chittagong Stock Exchange (Direct Listing) Regulations
2006 is applicable for direct listing of shares of public limited companies.
(d) Right Issue
The SEC (Rights Issue) Rules 2006 is applicable for right issue of capital. Rights share means new
shares offered to the existing shareholders of a public listed company in proportion to their existing
holding out of total shares of the company. 65
(e) Bonus Issue
It mean the distribution of new shares to the existing shareholders of the company.66 According to the
Companies Act 1994 of Bangladesh, where a company issues shares at a premium a sum equal to the
aggregate amount or value of the premiums on those shares shall be transferred to the share premium
account which may be applied by the company in paying up unissued shares of the company to be
issued to member of the company as fully paid bonus shares.67
(f) Asset Backed Security Issue
Asset Backed Security means a financial security backed by a loan, lease or receivables against assets.
In Bangladesh, Asset backed security is issued under the SEC (Asset Backed Security Issue) Rules
2004.
2

Listing Regulations of the UK

The FSA listing rules describes the different methods by which securities may be brought to listing to
the stock market in the UK. 68
(a) Offer For Sale or Subscription
An offer for sale is an invitation to the public by, or on behalf of, a third party to purchase securities
of the issuer already in issue or allotted. 69 An offer for subscription is an invitation to the public by, or
on behalf of, an issuer to subscribe for securities of the issuer not yet in issue or allotted. 70

65

Securities and Exchange Commission (Rights Issue) Rules 2006 (Bangladesh) r 2.

THEFREEDICTIONARY, Bonus Issue (12 June 2012)< http://financial-dictionary.thefreedictionary.com/Bonus+Issue>.
67
Companies Act 1994 (Bangladesh) s 57.
68
FSA Listing Rules (UK) 4.

66

25 | P a g e

(b) Placing
A placing is a marketing of securities already in issue but not listed or not yet in issue, to specified
persons or clients of the sponsor or any securities house assisting in the placing, which does not
involve an offer to the public or to existing holders of the issuers securities generally. 71
(c) Intermediaries Offer
An intermediaries offer is a marketing of securities already or not yet in issue, by means of an offer
by, or on behalf of, the issuer to intermediaries for them to allocate to their own clients. The UKLR
may require a list of the names of the intermediaries to whom shares were allocated. 72
(d) Introduction
An introduction is a method of bringing securities to listing not involving an issue of new securities or
any marketing of existing securities because the securities are already widely held by the public.73 In

this case the UKLR may require to see the share register and the securities must be of such amount
and so widely held that their marketability when listed can be assumed. 74
(e) Rights Issue
A rights issue is an offer to existing holders of securities to subscribe or purchase further securities in
proportion to their holdings made by means of the issue of a renounceable letter (or other negotiable
document) which may be traded (as nil paid rights) for a period before payment for the securities is
due. 75 In a rights issue the offer must remain open for acceptance for at least 21 days.76
(f) Open Offer
An open offer is an invitation to existing holders of securities to subscribe or purchase securities in
proportion to their holdings, which is not made by means of a renounceable letter (or other negotiable
document).77

69

Ibid r 4.4.
Ibid r 4.5.
71
Ibid r 4.7.
72
Ibid rr 4.10- 4.11.
73
Ibid r 4.12.
74
FSA Listing Rules r 4.13.
75
Ibid r 4.16.
76
Ibid r 4.21.
77
Ibid r 4.22.
70

26 | P a g e

(g) Acquisition or Merger Issue

An acquisition or merger issue (or vendor consideration issue) is an issue of securities in
consideration for an acquisition of assets, or an issue of securities on an acquisition of, or merger
with, another company as consideration for the securities of that other company.78
(h) Vendor Consideration Placing
A vendor consideration placing is marketing, by or on behalf of vendors, of securities that have been
allotted as consideration for an acquisition.79
(i) Capitalisation Issue or Bonus Issue
A capitalisation issue (or bonus issue) in lieu of dividend or otherwise is an issue to existing holders
of securities, in proportion to their holdings, of further shares credited as fully paid out of the issuers
reserves. 80
(j) Issue for Cash
An issue for cash is an issue of securities for cash to persons who are specifically approved by
shareholders in general meeting or an issue pursuant to a general disapplication of section 89 of the
Companies Act 1985 approved by shareholders in general meeting. 81
(k) Other Methods
Securities of a class already listed may be granted a listing if they arise from

an issue for cash,

an exchange for, or a conversion of securities into, another class of securities or
an exercise of options or warrants to subscribe securities conversion of securities of one class
into securities of another class (including options under an employees share scheme). 82

Market Efficiency and Disclosure of Financial Information

A fair, efficient and transparent stock market is essential for a country for its industrialization and
economic development. In general terms, the efficient Stock markets theory is concerned with
78

Ibid 4.27.
Ibid 4.29.
80
Ibid 4.31.
81
Ibid 4.33.
82
Ibid 4.34.
79

27 | P a g e

whether prices of securities at any point in time fully represent available price sensitive information of
those securities. A strong form efficient stock market is one where the prices reflect all relevant
information, including information that has not yet been made to public. 83 In response, proponents of
the hypothesis have stated that the market is practically efficient for investment purposes for most
individuals.84 Therefore, to bring efficiency in the market financial statements and price sensitive
information of the listed company must be disclosed properly to the public.

Regulations regarding Financial Disclosure in Bangladesh

(a) Submission of financial statements by listed Companies

As per the Securities and Exchange Ordinance 1969, an issuer of a listed security is obliged to furnish
to the Stock Exchange, to the security holders and to the Commission an annual report of its affairs
and such other documents, information or explanation relating to its affairs as the Commission may, at
any time, by order in writing, require.85 The financial statements of an issuer of a listed security (listed
Company) shall include a balance sheet, profit and loss account and cash flows statement, and notes
to the accounts. The financial statements of a listed Company shall be prepared in accordance with the
requirements laid down in the International Accounting Standards (IAS) as adopted by the Institute of
Chartered Accountants of Bangladesh, i.e., the Bangladesh Accounting Standards (BAS). The
financial statements of an issuer of a listed security shall be audited by an independent auditor in
accordance with the International Standards on Auditing (ISA) applicable in Bangladesh, i.e., the
Bangladesh Standards on Auditing (BSA). Provided that financial statements may also be audited by
an auditor appointed by the Commission, whenever such audit is deemed by the Commission
necessary in the public interest.

86

Financial statements shall be audited within one hundred and

twenty days from the date on which the issuers financial year ends and a copy of such audited
financial statements shall be submitted to the Commission and the Stock Exchange within fourteen
days thereof. 87 Forms prescribed for the purpose of preparing the financial statements and the audit
report may be adapted or amended, if deemed necessary, for compliance with the IAS and the ISA.88

(b) Action for Failure to Conduct Proper Audit

Where the SEC on examination of the audited financial statements of a listed company, finds that the
audit has not been conducted, or the audit report has not been prepared, in accordance with the
83

Eilis Ferran, Principle of Corporate Finance Law (Oxford University Press, 2008) 75-76.
Wikipedia, above n 8.
85
Securities and Exchange Ordinance s 11.
86
Securities and Exchange Rules 1987 (Bangladesh) r 12.
87
Ibid r 12(3A).
88
Ibid r 13A.
84

28 | P a g e

provisions of these rules it may declare the firm of chartered accountants which, or the auditor who,
conducted the audit, ineligible for acting as an auditor of any issuer of a listed security for a period not
exceeding five years.89

(c) Submission of periodical report

Every listed company shall, within one month of close of the first half-year, transmit to the stock
exchange in which its securities are listed, to the security holders and to the SEC half yearly financial
statements which shall be prepared in the same manner and form as the annual financial statements.90

(d) Mode of filing or submission of reports

Any person required by the Ordinance or any of these rules to furnish any document, statement and
report to the SEC, Stock exchanges and other agencies shall furnish it, either in person or through an
agent, or send it by registered post.91

Financial Disclosure framework in the UK

(a) Accounts to Give True and Fair View

As per the Companies Act 2006 of the UK the directors of every company must satisfied that they
give a true and fair view of accounts and financials of the company. The directors have to prepare the
accounts for every financial year. The accounts may be prepared according to the Companies Act
2006 of the UK or according to the International Financial Reporting Standards (IFRS).92 According
to FSA Disclosure Rules and Transparency Rules (DTR), audited annual reports must be published
within four months after ending of the financial year and half-yearly financial reports, need not to be
audited, must be prepared not more than two months from the period for which it was prepared. 93

(b) Application of Financial Reporting Standard 1

These basic requirements along with accounting standards require a cash flow statement as per
Financial Reporting Standards of the UK (FRS 1).
89

Ibid r 12(3B)
Ibid r 13.
91
Ibid r 14.
92
Companies Act 2006 (UK) c 46, ss 393-395.
93
FSA Disclosure Rules and Transparency Rules (UK) rr 4.1.3, 4.2.2.
90

29 | P a g e

(c) Directors' Remuneration Report

The directors of a company listed in the LSEs main market are also required to prepare a directors
remuneration report for each year of the company. If the director fails to prepare the report, he will be
liable to a fine; or on summary conviction, to a fine not exceeding the statutory maximum. 94

(d) Audit of Annual Accounts

Unless a company is exempt from audit under sections 477, 480 or 482 the annual report of a
company in the UK must be independently audited.95 The auditor must state whether the annual report
has prepared in accordance with the UK Companies Act and the ISA Regulation.96

(e) Annual Accounts and Reports to be Made Available on Website

The companies listed LSEs main market must make their annual report available on a website which
is freely assessable by public in general. It must remain so available until the annual accounts and
reports for the company's next financial year are made available 97

(f) Financial Reports of Companies Listed in the AIM

An AIM company must prepare a half-yearly report which must be notified without delay and in any
event not later than three months after the end of the relevant period. An AIM company must publish
annual audited accounts which must be sent to its shareholders without delay and in any event not
later than six months after the end of the financial year to which they relate.98

(a) Free Annual Reports service

An investor wishes to know financial information of the listed companies of The LSE may get it
easily from LSEs Free Annual Reports service which provides the annual and interim report of 1300
listed companies of the LSE.99

94

Ibid s 420.
Ibid s 475.
96
Ibid s 495.
97
Ibid s 430.
98
AIM Rules for Companies, (London Stock Exchange) 2006 rr18-19.
99
London Stock Exchange, Free Annual Reports service (20 August 2012) <http://www.londonstockexchange.com/prices-andmarkets/stocks/tools-and-services/free-annual-reports/free-annual-reports.htm>.
95

30 | P a g e

Safeguard against Market Manipulation

Market manipulation is a deliberate attempt to interfere with the free and fair operation of the market
and create artificial, false or misleading appearances with respect to the price of financial market.
Market manipulation may be termed as transactions that create an artificial price or maintain an
artificial price for a security in the stock market.100

Securities Laws of Bangladesh

(a) Fraudulent Acts

In Bangladesh, market manipulation is not defined in the Securities Laws. However, the Securities
and Exchange Ordinance 1969 (SEO) prohibits some acts as fraudulent acts.101 Fraudulent acts may
happen when a person for the purpose of inducing, dissuading, effecting, preventing or in any manner
influencing or turning to his advantage, the sale or purchase of any security, directly or indirectly,(a) employ any device, scheme or artifice, or engage in any act, practice or course of business,
which operates or is intended or calculated to operate as a fraud or deceit upon any person; or
(b) make any suggestion or statement as a fact of that which he does not believe to be true; or
(c) omit to state or actively conceal a fact having knowledge or belief of such fact; or
(d) include any person by deceiving him to or omit to do anything which he would not do or omit
if he were not so deceived; or
(e) do any act or practice or engage in a course of business, or omit to do any act which operates
or would operate as a fraud, deceit or manipulation upon any person, in particularI

make any fictitious quotation;

II

create a false and misleading appearance of active trading in any security;

III

effect any transaction in such security which involves no change in its beneficial
ownership;

IV

enter into an order or orders for the purchase and sale of security which will
ultimately cancel out each other and will not result in any change in the beneficial
ownership of such security;

directly or indirectly effect a series of transactions in any security creating the

appearance of active trading therein or of raising of price for the purpose of including

100
101

Wikipedia, Market manipulation (16 August 2012) < http://en.wikipedia.org/wiki/Market_abuse >.

Securities and Exchange Ordinance s 17.

31 | P a g e

its purchase by others or depressing its price for the purpose of inducing its sale by
others;
VI

being a director or an officer of the issuer of a listed equity security or a beneficial

owner of not less than ten per cent, of such security who is in possession of material
facts omit to disclose any such facts while buying or selling such security.

(b) Liabilities and Penalty

Any person who participates in any act or transaction in which amounts to fraudulent acts shall be
liable to any person who has purchased or sold a security in reliance on such act or transaction for
damages caused by such reliance, without regard to the presence or absence of any contractual
relationship between the two. 102

Any person involving in fraudulent acts shall be punishable with imprisonment a term which may
extend to five years, or with fine which shall not be less than five lakh taka or with both. Where the
person guilty of an offence is a company or other body corporate, every director, manager or other
officer responsible for the conduct of its affairs shall, unless he proves that the offence was committed
without his knowledge or that he exercised all diligence to prevent its commission, be deemed to be
guilty of the offence. 103

Regulatory Measures of the UK

In the UK, the term Market Abuse has been defined in the Financial Services and Markets Act 2000.
On the other hand, the Directive 2003/6/EC of the European Parliament and of the Council of 28
January 2003 on insider dealing and market manipulation, i.e., the Market Abuse Directive (MAD) 104
deals with Market manipulation. Article 2 of the Directive defines the term Market manipulation.
As a member state of the EU, the UK is bound by this Directive to take action against market
manipulation or market abuse and, therefore, enacted the Financial Services and Markets Act 2000
(Market Abuse) Regulations 2005.

102

Securities and Exchange Ordinance s 23(3).

Ibid s 24.
104
MAD came into force on 1 July 2005. It is a law that aims to fight cross-border market abuse by establishing a common approach
among EU member states.
103

32 | P a g e

(a) Market Abuse

As per FSMA 2000, market abuse is behaviour (whether by one person alone or by two or more
persons jointly or in concert) which occurs in relation to
i.

qualifying investments admitted to trading on a prescribed market,

ii. qualifying investments in respect of which a request for admission to trading on such a market
has been made, or
iii. investments which are related investments in relation to such qualifying investments, and
the behaviour must falls within any one or more of the types of behaviour mentioned below105:

1. Insider Dealing-An insider deals, or tries to deal, on the basis of inside information.
Improper disclosure and misuse of information are kinds of insider dealing.106

2. Improper Disclosure-An insider improperly discloses inside information to another

person. 107

3. Misuse of Information-Behaviour based on information that is not generally available but

would affect an investors decision about the terms on which to deal.108

4. Manipulating Transactions-Trading, or placing orders to trade, that gives a false or

misleading impression of the supply of, or demand for, one or more investments, raising the
price of the investment to an abnormal or artificial level.109

5. Manipulating Devices- Trading, or placing orders to trade, which employs fictitious devices
or any other form of deception or contrivance.110

6. Dissemination-It means giving out information that conveys a false or misleading impression
about an investment or the issuer of an investment where the person doing this knows the
information to be false or misleading. 111

105

FSMA s 118(1).
Ibid s 118(2).
107
Ibid s 118(3).
108
Ibid s 118(4).
109
Ibid s 118(5).
110
Ibid s 118(6).
111
Ibid s 118(7).
106

33 | P a g e

7. Distortion and Misleading Behaviour-Behaviour that gives a false or misleading impression

of either the supply of, or demand for, an investment; or behaviour that otherwise distorts the
market in an investment.112

(b) Code of Market Conduct

The FSMA 2000 impose obligation upon the FSA to prepare and issue a code containing such
provisions as the Authority considers will give appropriate guidance to those determining whether or
not behaviour amounts to market abuse. 113 The FSA On 1st December 2001, introduced its Code of
Market Conduct (MAR 1) to define the behaviour which amounts to market abuse.

(c) Penalties in Cases of Market Abuse.

(i) Power of FSA to Impose Penalties in Cases of Market Abuse
If the FSA is satisfied that a person (a) is or has engaged in market abuse, or (b) by taking or
refraining from taking any action has required or encouraged another person or persons to engage in
behavior which, if engaged in by that person, would amount to market abuse, it may impose on him a
penalty of such amount as it considers appropriate.114
(ii) Power of Court to Impose penalty in Cases of Market Abuse.
The FSA may on an application to the court under section 381 or 383 of FSMA 2000 request the court
to consider whether the circumstances are such that a penalty should be imposed on the person to
whom the application relates. The court may, if it considers it appropriate, make an order requiring the
person concerned to pay to the FSA a penalty of such amount as it considers appropriate.115 The
jurisdiction conferred by these sections is exercisable by the High Court and the Court of Session. 116

112

FSMA s 118(8).
Ibid s 119(1).
114
Ibid s 123(1).
115
FSMA s 129.
116
Ibid ss 381(5), 383(8).
113

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1. Injunctions
If, on the application of the Authority, if the court is satisfied it may make an order

restraining the market abuse117, or

requiring person engaging in market abuse to take such steps as the court may direct to remedy it
where steps could be taken for remedying the market abuse.118
restraining the person concerned from disposing of, or otherwise dealing with, any assets of his
which it is satisfied that he is reasonably likely to dispose of, or otherwise deal with. 119
2. Restitution Orders

If, on the application of the Authority, if the court is satisfied it may make an order the person
concerned to pay to the Authority such sum as appears to the court to be just having regard

to the profits appearing to the court to have accrue as a result of market abuse, or
to the extent of the loss or other adverse effect where one or more persons have suffered loss or
been otherwise adversely affected as a result, and
to the profits appearing to the court to have accrued and to the extent of the loss or other adverse
effect.120

Any amount paid to the FSA in pursuance of an order under section 383(4) must be paid by it to such
qualifying person or distributed by it among such qualifying persons as the court may direct.121

K Insider Trading
Insider trading in stock market occurs when a person in possession of price-sensitive information
about a company buys or sells securities in that company and obtained better benefit than persons
unaware about that inside information. 122 Insider trading may happen in various ways. For example, if
a company director who has inside information about something which would, when publicly known,
cause the price of the companys shares to rise may personally take advantage of that information and
buy the shares at a cheap rate. Similarly, a person having a professional relationship with company,
shares the confidence may do the same. 123

117

Ibid s 381(1).
Ibid s 381(2).
119
Ibid s 381(4).
120
FSMA s 383.
121
Ibid s 383(5).
122
Davies, above n 32, 1083 nn 30-1.
123
M Zahir, Company and Securities Law (The University Press Limited,revised ed, 2005) 278 nn 30.1.1.
118

35 | P a g e

Bangladeshi Securities Laws

Securities and Exchange Commission Act 1993 specially stated, under section 8(2), that one
of the specific functions of the SEC to prohibit insider trading.124
(a) Insider Trading

As per the Securities and Exchange Commission (Prohibition of Insider Trading) Rules 1995 of
Bangladesh insider-trading means buying or selling or transferring by any other means of any
security by any insider on the basis of price-sensitive information125.Price-sensitive information
means any such information which, if published, may influenced market price of the concerned
security and includes such types of information provided in section 2(d) of this Rules. This Rules
defines the insider as (i) any such person who is a director, principal stock holder, managing agent,
banker, auditor, advisor, officer or employer of any company; (ii) any such person who may know any
price-sensitive information or may be considered to have the opportunity of knowing the said
information because of his connection with any director, principal stock holder, managing agent,
banker, auditor, advisor, officer or employer of any company or because of his connection with the
company or because of this position. 126 No insider shall supply to any other person any pricesensitive information except for the purpose of any law, the companys articles of association and any
rules or regulations applicable to the company.127

(b) Prohibition of Insider Trading

According to the SEC (Prohibition of Insider Trading) Rules 1995, no insider personally or by others
can provide information for the investment business.128 The sponsor, director, officer, staff, auditor,
legal advisor and other insiders of any listed company of the security exchange are restricted from
buy, sell, transfer or any other type of handover of shares of the concerned company between the date
preceding financial year end by two months and the date of final acceptance or approval of the annual
accounts by the board.129

124

Zahir, above n 40, 284 nn 30.4.1.

Securities and Exchange Commission (Prohibition of Insider Trading) Rules 1995 (Bangladesh) r 2(f).
126
Ibid r 2(e).
127
SEC (Prohibition of Insider Trading) Rules r 3.
128
Alam et al, above n 1, 3.
129
Ibid r 4(2).

125

36 | P a g e

(c) Penalty

If a person involves in insider-trading the SEC may cancel or suspend the license of the that person
where he is a stock-broker or stock-dealer; may direct him to take over the charge of or not to transfer
the share or stock acquired through insider-trading for a specified period. The SEC may also institute
an enquiry to find if anyone has involved in insider-trading and take any decision after receipt of such
report.130

Position of the UKs Regulations

(a) Sanctions for Insider Dealing

In the UK, the laws relating to insider trading are incorporated in the Criminal Justice Act 1993. An
individual who has information as an insider is also guilty of insider dealing if (a) he encourages
another person to deal in securities that are (whether or not that other knows it) price-affected
securities in relation to the information, knowing or having reasonable cause to believe that the
dealing would take place in the circumstances mentioned in subsection (3); or (b)he discloses the
information, otherwise than in the proper performance of the functions of his employment, office or
profession, to another person.131 Dealing in securities occurs if (a) a person acquires or disposes of
the securities (whether as principal or agent); or (b) he procures, directly or indirectly, an acquisition
or disposal of the securities by any other person.132 inside information means information which (a)
relates to particular securities or to a particular issuer of securities or to particular issuers of securities
and not to securities generally or to issuers of securities generally;(b) is specific or precise;(c) has not
been made public; and (d) if it were made public would be likely to have a significant effect on the
price of any securities. 133 A person becomes insider if and only if (a) it is, and he knows that it is,
inside information, and (b) he has it, and knows that he has it, from an inside source.134

(b) Penalty
An individual guilty of insider dealing shall be liable (a) on summary conviction, to a fine not
exceeding the statutory maximum or imprisonment for a term not exceeding six months or to both; or
130

Ibid rr 5-7.
Criminal Justice Act 1993 (UK) c 36, s 52(2).
132
Ibid s 55(1).
133
Ibid s 56(1).
134
Ibid s 57(1).

131

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(b) on conviction on indictment, to a fine or imprisonment for a term not exceeding seven years or to
both. 135 However, the insider dealer may be liable for market abuse under the part VIII of the

FSMA 2000. An injunction order136 may be imposed against him and the court may impose
restitution orders137 as well.

L Protection of the Investors

Investors Protection Fund in Bangladesh

In Bangladesh, to protect the interest of the investors, Investors Protection Fund has been created
under the Dhaka/Chittagong Stock Exchange Investors Protection Fund Regulations 1999. DSE/CSE
Investor Protection Fund was established in 1999 to compensate within define limits, the claims of the
Client against defaulting broker. If any stock broker is declared insolvent by the court or itselfor if
any specific reason causes stock broker business to be wound up resulting in failure to pay the clients
money, related stock exchange takes initiative to compensate the investors from the fund.138 The
compensation paid to an individual investor shall not exceed a sum of Tk. 50,000/-.

UK Financial Services Compensation Scheme

The Financial Services Compensation Scheme (FSCS) is the UK's compensation fund of last resort
for customers of authorised financial services firms. The FSCS is independent of the government and
the financial industry, and was set up under the FSMA 2000.139 The FSCS only pays compensation for
financial loss. The authorised financial services firms include stockbrokers, asset managers
and financial advisers etc. The maximum level of compensation for claims against firms declared in
default on or after 1 January 2010 is 50,000 per person per firm. 140

135

Criminal Justice Act s 61(1).

FSMA s 381.
137
FSMA s 382.
138
Securities and Exchange Commission, above n 18, 13-14
139
FSMA pt XV.
140
Financial Services Compensation Scheme, Investment Limits(30 August 2012) < http://www.fscs.org.uk/what-wecover/eligibility-rules/compensation-limits/investment-limits/>.
136

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M Codes and Guidelines

1

SEC Corporate Governance Guidelines

The SEC issued Corporate Governance Guidelines in February 2006 for the listed companies on the
basis either comply or explain. However, the SEC Revised the Corporate Governance Guidelines on
07 August 2012.141 These guidelines set the number of the board members of the company which shall
not be less than five and more than 20 twenty. It requires appointment of independent directors who
will be least one-fifth of the total number of directors. The person should be a Business
Leader/Corporate Leader/Bureaucrat/University Teacher with Economics or Business Studies or Law
background/Professionals like Chartered Accountants, Cost & Management Accountants, Chartered
Secretaries. The independent director must have at least 12 (twelve) years of corporate
management/professional experiences. Company secretary, chief financial officer (CFO) and head of
internal control department. Compliance status of each of the requirements, as per the guidelines,
must be included in the annual report and the company shall obtain a certificate from a practicing
Professional

Accountant/Secretary

(Chartered

Accountant/Cost

and

Management

Accountant/Chartered Secretary) regarding compliance of conditions of.

Codes and Guidelines in the UK

(a) UK Corporate Governance Code

As per Section 89O142 of the FSMA 2000 Corporate governance rules, i.e., the UK Corporate
Governance Code is prepared. The current edition of the Code was published in 2010.143According to
the Code, the board should appoint one of the independent non-executive directors to be the senior
independent director to provide a sounding board for the chairman and to serve as an intermediary for
the other directors when necessary. The board should identify in the annual report each non-executive
director it considers to be independent. The chairman should ensure that new directors receive a full,
formal and tailored induction on joining the board and agree with each director their training and
development needs. 144

141

Securities
and
Exchange
Commission,
Securities
Related
Laws(30
August
2012)
<http://www.secbd.org/Notification%20on%20CG-07.8.12-Amended.pdf >
142
Inserted by section 1269 of the UK Companies Act 2006
143
Financial Reporting Council, UK Corporate Governance Code (20 August 2012) < http://www.frc.org.uk/Our-Work/CodesStandards/Corporate-governance/UK-Corporate-Governance-Code.aspx>.
144
See UK Corporate Governance Code 2010

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(b) FSA Code of Market Conduct

The provisions of part of the FSA Handbook known as MAR 1.The Code of Market Conduct contains
guidance from the FSA to determine whether or not behaviour amounts to market abuse.145

IV ACTUAL SCENARIO OF THE STOCK MARKET OF BANGLADESH

The stock market of Bangladesh is a newly established emerging market where the regulatory system
and the trading mechanisms are not as developed as compared to mature and developed markets 146
like the stock market of the UK. It can easily be uncovered a number of weak points of the stock
market of Bangladesh if it is compared with the stock market of the UK. The real picture of the
Bangladeshi market is pathetic.

Real Scenario of the stock market

In 2010, the benchmark index of the DSE climbed over 90%. Such heady gains fed a hunger for
investing among minor players, even among those who knew little about the stocks they were trading.
Unfortunately, the market has dropped 55% since early 2011. Although stock marker of Bangladesh
booms and busts before during its history, the sudden losses suffered over the few months by millions
of small investors threaten to its economic growth.147 The unexpected rise and fall in share prices
mostly followed from the general confidence of the investors about the market stability, ecstasy of
investment in shares, prospect of quick capital gains and absence of investor friendly environment. 148
As a result, the stock market of Bangladesh has become senile.

Factors behind the Market Senility

There are a lot factors behind the market senility. The problems behind the weakness of the market of
are described below concisely:
1

Absence of Market Efficiency

Investors are perhaps depending more on speculative analysis which could attract more stable longterm investors who are sure about their investment tenure and expectations.149
145

Practical Law Company Limited, Code of Market Conduct (22 August 2012) < http://corporate.practicallaw.com/2-107-5932 >.
Mobarek, Mollah and Bhuyan, above n 30, 38.
147
Chowdhury, above n 5.
148
See Tamjid Mishu, Problems and Prospects of Stock Market of Bangladesh, .(10 June 2012) Scribd.
<http://www.scribd.com/doc/23789793/Problems-and-Prospects-of-Bangladesh-Stock-Market>)
149
Ibid
146

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Market Manipulation and Insider Dealing

Some members being the directors of listed companies of the market look for their own interest using
their internal information of share market. It has been observed that the share value of some profitable
companies has been increased fictitiously some items that hampers the smooth operation of Stock
market. 150

Improper Disclosure of Financial Statement

Access to high quality and credible corporate information remains a major problem in the market.
Many companies do not focus real position of the company as some audit firms involve incorruption
while preparing financial statements. As a result, the shareholders as well as investors do not have any
idea about position of that company151 Audited financial reports are rarely reliable and free from the
control of the owners.152In an resent study it was found that about 87 per cent of the listed companies,
other than banks and insurances, missed at least one of four accounting criteria, corporate governance
guidelines, financial reporting standards while preparing their financial statements.153

Inappropriate Accounting standards and Poor Audit Report:

Despite irregularities (in respect of non-compliance with the applicable IASs) in the audit report, the
auditors issue unqualified audit report on the financial statements. Following the tradition of English
law, Bangladesh accounting standards are not based on codified law, but rely on Generally Accepted
Accounting Principles (GAAP) developed by accounting profession.
5

Absence of Fair Corporate Behaviour

The Corporate Governance Guidelines is prepared to show the corporate controllers the right way to
keep fair environment in the corporate sectors and the market. However, the corporate controllers
have almost failed to comply with the Guidelines. 154

150

Ibid
Ibid
152
Md Awal Al Kabir, Corporate Governance as Per OECD Principles: A Comparative Study of Bangladesh and Some Selected
Asian Countries (2011) 69 (41) Bangladesh Accountant 47, 59.
153
FE Report, Listed cos need to prepare quality financial reports, The Financial Express (Dhaka) 15 July 2012, 1.
154
Ibid
151

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Lack of Institutional and International Investment

Most companies in Bangladesh have a pessimist approach in attracting foreign investment. As a

result, there is a lack of drive from the international investor community for better corporate
governance. 155

Inconsistency among the Regulations:

Though the companies Act 1994 provides provisions regarding preparation and publication of
financial statements, disclosures and auditing in many cases, the Act lacks clarity with regard to
statutory requirements on disclosures in the financial statements of listed companies. 156 Moreover, in
some cases the SEC may supersede the provisions of the Companies Act 1994.157

Problems in the Independent Directorship

Most independent directors represent current or former government officials or bureaucrats. They are
selected to assist company in getting licenses or as payback for previous favours. In Bangladesh,
independent directors do not act as representative of the ordinary investor.158
9

Crisis of the Market Regulators

The SEC is not efficient enough to play effective role against market instability. The SEC has
shortage of work force and qualitative professionals involving in independent research, monitoring
mechanism and prompt decision-making. 159

10 Scattered Regulatory Arrangements

Bangladesh follows the hybrid legal system to settle the corporate and the securities related offences
and disputes.160 At present, these types of cases are pending in different civil and criminal courts.

155

Ibid
Ibid
157
Securities and Exchange Ordinance s 2CC.
158
Kabir, above n 152, 59.
156

159

Md Tariqur Rahman and Khondker Golam Moazzem, Capital Market of Bangladesh: Volatility in the Dhaka Stock
Exchange (DSE) and Role of Regulators(2011) 6 (7) International Journal of Business and Management 86, 89.
160

Kabir, above n 152, 59.

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11 Problems in Enforcement of Laws

The regulatory frameworks of the stock market are not strong enough to restrain the persons involving
from market abuse or fraudulent activities. The existing laws are slowly enforced. It is a matter of
sorrow that big players behind the 1996 market turmoil are not punished yet. Still the situation is
unchanged after 2011. Until June 2011, total 366 cases filed by or against the SEC are pending in
different courts.161

V RECOMMENDATIONS

In Bangladesh, sustainable improvement for the stock market is a hard task. For a developing country
like Bangladesh, the significance of strong and long lasting improvement of the market is crucial. The
Government, Market regulators, Corporate Controllers and the investors must work cordially to make
the market as a Strong and efficient market. On the basis of the securities laws and the stock market of
the UK following steps might be considered for improving the existing legal frameworks for the
development of the stock market:

There should be diversity in the stock market which might provide opportunity to raise capital
in an alternative way.

The bond market, which might be a vital source of debt financing, should be developed.
Bonds may be the key form of medium and long term financing for the governments. Both
national and foreign investors should be encouraged to participate and raise capital from this
market.

Trading transparency and greater standardisation of OTC contracts should be ensured in the
OTC market. Effective measures should be taken to make it favourite to the investors.

The requirements of issuing prospectus should be more descriptive. Therefore, the investors
will get the proper information of the company before invest in it. The prospectus must be
prepared to assist the investors ascertain the risk of investment in securities. Specific penal
provision must be inserted for violation of prospectus requirements.

161

Securities and Exchange Commission, above n 18, 81.

43 | P a g e

Besides traditional ways of issuing and raising capital from the market, various devices
should be introduced by the SEC to provide better opportunity for the corporations for raising
capital in a flexible way from the market.

Improved regulatory disclosure rules should be helpful for investors and financial analysts
who are participating directly in the stock market. For proper disclosure of the financial
statements of the companies the Accounting Standards, the Standards on Auditing and the
Financial Reporting Standards must follow the international standard. Latest version of the
statement must be displayed in the websites of the concerned companies and it must freely be
assessable by all.

Specific law must be drafted to define and to restrain the activities which amount to market
manipulation. Besides the code of the market conduct should be prepared by the SEC.

Separate funds for Investors Compensation Scheme must be raised to support the investors
suffered loss from the stock market.

The OCED Principles of Corporate Governance in be strictly complied with to ensure proper
corporate culture in the corporations.

The independent directors must be selected as a representative of the non-controlling

shareholders of the corporations.

There must be harmony in the corporate and the securities laws. The regulations must not be
scattered. Therefore any one can find the required regulations easily.

Skilled officials should be appointed in the SEC to make proper regulations. The SEC must
take its decision rationally rather arbitrarily. Its accountability must be ensured different
activities.

There must be a separate and unique judicial system for the rapid trial of stock market related
disputes and offences. The investors must be provided adequate damages for unjust financial
loss. Punishment for the offence must be harsh.

The court system must be skilled and trained up to adjudicate the securities related disputes
accurately.

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VI

SUMMARY AND CONCLUSION

In modern world, the stock market is the main source of corporate financing and fund raising for most
of the nations. The stock market reflects the strength of the economy of a country. An active stock
market may be an important mechanism for economic growth of a developing country like
Bangladesh. The stock market can play a vital role to strengthen the sustainable development of this
emerging economic and fast growing nation. Creating corruption free and investor friendly regulatory
frameworks should have a positive impact in the long-term development in the stock market of
Bangladesh. Market discipline is indispensable for long-term and sustainable development in the
market. It is necessary to reform the legal frameworks to support financial development and to protect
the investors. Strong framework rules should be framed restore the investors confidence. Flexible
legal frameworks must be adopted. The regulators must cope with continuously to the changed global
economy.

45 | P a g e

Bibliography
A Articles/Books/Reports

Alam, Md Mahmudul et al, Effect of Policy Reforms on Market Efficiency: Evidence from Dhaka
Stock Exchange (Research Article No 864940, Economics Research International, Hindawi
Publishing Corporation, 2011)
Capital Market Enquiry Committee, Capital Market Inquiry Report (2011)
Daouk, Hazem, Charles M C Lee and David T Ng, Capital Market Governance: How Do Security
Laws Affect Market Performance?(Working Paper No 2005-08, Department of Applied Economics
and Management, Cornell University, Ithaca, New York 14853-7801 USA, April 2005) 2
Davies, Paul Lyndon, Gower and Davies' Principles of Modern Company Law (Sweet & Maxwell,
8th ed, 2008)
Dhar, Nirmalendhu, Company Law & Partnership (ReMiSi Publishers,4th ed, 2008)
Evans, David and Paul Gruba, How to Write a Better Thesis (Melbourne University Publishing, 3rd ed,
2011)
Faruque, Abdullah Al, Essentials of Legal Research (Palal Prokashoni, 2009)
Ferran, Eilis, Principle of Corporate Finance Law (Oxford University Press, 2008)
FE Report, Listed cos need to prepare quality financial reports, The Financial Express (Dhaka) 15
July 2012, 1
Filer, Randall, K Jan Hanousek and Nauro F Campos, Do Stock Markets Promote Economic
Growth?(Working Paper No 267, Center for Economic Research and Graduate Education Economic Institute, Prague, September 1999)
Financial Services Authority, Trading transparency in the UK secondary bond markets (Discussion
Paper No 05/5, UK Financial Services Authority, September 2005)
Financial Services Authority and HM Treasury, Reforming OTC Derivative Markets: A UK
perspective (Report, Financial Services Authority and HM Treasury, December 2009)
Kabir, Md Awal Al, Corporate Governance as Per OECD Principles: A Comparative Study of
Bangladesh and Some Selected Asian Countries (2011) 69 (41) Bangladesh Accountant 47

Mobarek, Asma, A Sabur Mollah and Rafiqul Bhuyan, Market Efficiency in Emerging Stock Market:
Evidence from Bangladesh (2008) 7 (17) Journal of Emerging Market Finance 18
Mollik, A T and Md Khokan Bepari, Weak-Form Market Efficiency of Dhaka Stock Exchange
(DSE), Bangladesh (Paper presented at 22nd Australasian Finance and Banking Conference , 24
August 2009)

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Rahman, Md Tariqur and Khondker Golam Moazzem, Capital Market of Bangladesh: Volatility in
the Dhaka Stock Exchange (DSE) and Role of Regulators(2011) 6 (7) International Journal of
Business and Management 86
Securities And Exchange Commission of Bangladesh, Annual Report (2002-2003)
Securities and Exchange Commission of Bangladesh, Annual Report (2010-2011)
Securities and Exchange Commission of Bangladesh, Quarterly Review (January-March 2010)
Zahir, M, Company and Securities Law (The University Press Limited, revised ed, 2005)

B Legislation

Bangladeshi Statutes

Capital Issues Act 1947

Companies Act 1994
Depository Act 1999
Depositories Regulations 2000
Depository (User) Regulations 2003
Dhaka/Chittagong Stock Exchange Investors Protection Fund Regulations 1999
Securities and Exchange Commission Act 1993
Securities and Exchange Commission (Asset Backed Security Issue) Rules 2004
Securities and Exchange Commission (Issue of Capital of Public Limited Company) Rules 2001
Securities and Exchange Commission (Over-the-Counter) Rules 2001
Securities and Exchange Commission (Prohibition of Insider Trading) Rules 1995
Securities and Exchange Commission (Public Issue) Rules 2006
Securities and Exchange Commission (Right Issue) Rules 2006
Securities and Exchange Ordinance 1969
Securities and Exchange Rules 1987
Notification No. SEC/CMRRCD/2003-109/Admin/ of the Securities and Exchange Commission of 2
July 2009 on amendments in the Securities and Exchange Commission (Issue of Capital) Rules, 2001

47 | P a g e

Notification No. SEC/CMRRCD/2008/186/115/Admin/30 of the Securities and Exchange

Commission of 5 October 2011 on amendments to the Securities and Exchange Commission (Public
Issue) Rules 2006
Notification No. SEC/CMRRCD/2006-158/134/Admin/44 of the Securities and Exchange
Commission of 7 August 2012 on the Corporate Governance Guidelines 2012

UK Statutes

AIM Rules for Companies 2010 (London Stock Exchange)

Criminal Justice Act 1993 c 36
Companies Act 2006 c 46
Companies (Trading Disclosure) Regulations 2008
Financial Services and Markets Act 2000 c 8
FSA Prospectus Rules
FSA Listing Rules
FSA Disclosure and Transparency Rules
Market Abuse Directive (MAD) 2005
UK Corporate Governance Code 2010

European Community Legislation

Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider
dealing and market manipulation

Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 on the
prospectus to be published when securities are offered to the public or admitted to trading on a
regulated market and amending Directive 2001/34/EC

48 | P a g e

Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the
harmonisation of transparency requirements in relation to information about issuers whose securities
are admitted to trading on a regulated market and amending Directive 2001/34/EC

Directive 2010/73/EU of the European Parliament and of the Council of 24 November 2010
amending Directives 2003/71/EC on the prospectus to be published when securities are offered to the
public or admitted to trading and 2004/109/EC on the harmonisation of transparency requirements in
relation to information about issuers whose securities are admitted to trading on a regulated market

Regulation (EC) No 809/2004 of the European Parliament and of the Council of 29 April 2004
implementing Directive 2003/71/EC

C Websites

Banglapedia, <http://www.banglapedia.org/>
Chittagong Stock Exchange Ltd <http:// www.csebd.com/>
Dhaka Stock Exchange Ltd, <http://www.dsebd.org/>
Euroclear <https://www.euroclear.com/>
Financial Service Authority,<http://www.fsa.gov.uk/>
Financial Services Compensation Scheme <http://www.fscs.org.uk/>
Financial Reporting Council, < http://www.frc.org.uk/>
Government of the UK,<http://www.legislation.gov.uk/>
Investopedia, <http://www.investopedia.com/>
London Security Plc <http://www.londonsecurity.org/faqs.php>
London Stock Exchange <http://www.londonstockexchange.com/>
Neel Chowdhury, The Rise and Fall of One of the World's Worst-Performing Stock Markets, The
Time (online), 2 February 2012,
<http://www.time.com/time/world/article/0,8599,2105845,00.html#ixzz21j1e5A6X>
Practical Law Company Limited, < http://corporate.practicallaw.com/>
Securities and Exchange Commission of Bangladesh, < http://www.secbd.org/>
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Seeking Alpha, World Equity Market Declines: -$25.9 Trillion (8 October 2008)
< http://seekingalpha.com/article/99256-world-equity-market-declines-25-9-trillion >
The Free Dictionary, < http://financial-dictionary.thefreedictionary.com/ >
Tamjid Mishu, Problems and Prospects of Stock Market of Bangladesh, (10 June 2012) Scribd.
<http://www.scribd.com/doc/23789793/Problems-and-Prospects-of-Bangladesh-Stock-Market>)
Wikipedia, <http://en.wikipedia.org/>

D Other

Financial Reporting Standards of the UK

International Financial Reporting Standards

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