Amendment to the Merchant Bankers rules dated 06.3.11

Notice
March 15, 2011

In exercise of the powers conferred under Section 24(1) of the Securities and Exchange Commission Act, 1993 (Act No. 15 of 1993), the Securities and Exchange Commission invites comments, advice, or objections from all concerned persons regarding the proposed amendment to the Securities and Exchange Commission (Merchant Bankers and Portfolio Managers) Rules, 1996.

It is requested that comments, advice, or objections regarding the proposed amendment be sent to the address below within two weeks of the publication of this notice in newspapers.

Chairman
Securities and Exchange Commission
Jiban Bima Tower (Floors 15, 16, 17 & 21)
10, Dilkusha B/A
Dhaka-1000.

Proposed Amendment
The Securities and Exchange Commission (Merchant Bankers and Portfolio Managers) Rules, 1996 shall be amended as follows:

In the aforementioned Rules:

1. The full stop at the end of serial number (t) of sub-rule (1) of Rule 2 shall be replaced by "."; and new serial numbers (u) and (v) shall be added after the said serial number (t) as follows:
   (u) "Board of Directors" means the Board of Directors of the Merchant Banker; (v) "Managing Director" means the Managing Director of the Merchant Bank.

2. After Rule 36 of "Chapter VIII", new Rules 37 and 38 under the new "Chapter IX" shall be added as follows:

Chapter IX
Appointment, Removal, Powers, etc. of the Managing Director

37. Appointment, Removal, etc. of the Managing Director.
    (1) The Board of Directors shall appoint a full-time "Managing Director" subject to the prior approval of the Commission.
    (2) A person appointed as Managing Director shall not be directly or indirectly involved with any stock exchange, any member of a stock exchange, any asset management company, any issuer company, or any securities business. Simultaneously, he/she shall not be a shareholder, promoter, or director of any Merchant Banker. (3) The term of office of the Managing Director shall be 3 (three) years (contract-based), which may be renewed with the prior approval of the Commission. Provided that no person who has attained the age of sixty-six years shall be eligible for appointment to the post of Managing Director or continue in the post of Managing Director. (4) If the Managing Director fails to properly perform the duties entrusted to him/her or is found guilty of misconduct or moral turpitude, the Board of Directors may remove him/her subject to the prior approval of the Commission. However, such decision must be passed by a vote of at least two-thirds of the members present at a special meeting of the Board of Directors for this purpose; Provided that before taking such decision, he/she shall be given a reasonable opportunity to present his/her written and oral views regarding the relevant allegations. (5) If the Managing Director wishes to resign, he/she shall submit an application to the Chairman of the Board of Directors 3 (three) months in advance and provide a copy thereof to the Commission. (6) If the post of Managing Director falls vacant or if he/she is unable to perform duties for any reason, the next senior officer of the respective Merchant Banker shall perform the interim duties of the Managing Director. (7) If the Board of Directors fails to make an appointment to the said post within 90 (ninety) days after the post becomes vacant, the Commission may make the appointment to this post. (8) The Commission may issue guidelines from time to time regarding the qualifications of the Managing Director as necessary. Provided that the appointment of the Managing Director of a Merchant Banker formed as a subsidiary of ICB, State-owned Banks, Financial Institutions, and Insurance Companies shall remain outside the purview of these Rules.

38. Powers of the Managing Director.
    (1) In the case of the respective Merchant Banker, the Managing Director shall implement all laws, rules, regulations, guidelines, orders, subordinate laws, and guidelines/orders issued from time to time by the Commission or the Board of Directors concerning the securities market; Provided that if any guideline or order issued by the Commission and the Board of Directors is contradictory, the guideline/order of the Commission shall prevail. (2) The Managing Director shall ensure compliance with these Rules and supervise the activities of the officers of the respective Merchant Banker. (3) The Managing Director shall be a member of all committees constituted by the Board of Directors; Provided that he/she shall not be a member of an inquiry committee formed for the purpose of taking disciplinary action against the Managing Director. (4) In any special situation, the Managing Director shall perform/exercise duties/powers not entrusted to him/her, simultaneously informing the Chairman of the Board of Directors and the Commission. However, such action must be approved by the subsequent meeting of the Board of Directors. (5) The Managing Director shall submit a monthly report to the Commission and the Board of Directors regarding administrative operations and compliance with all relevant laws, rules/regulations, subordinate laws, guidelines, and orders.