Amendment to the Securities and Exchange Commission (Merchant Banker and Portfolio Manager) Rules, 1996

1
Notification
December 20, 2011
No.- SEC/CMRR/CID/2001-50/121/Administration/---------------: In exercise of the powers conferred under sub-section (1) of Section 24 of the Securities and Exchange Commission Act, 1993 (Act No. 15 of 1993), and after prior publication, the Securities and Exchange Commission hereby amends the Securities and Exchange Commission (Merchant Banker and Portfolio Manager) Rules, 1996, as follows:

In the aforementioned Rules:

1. The period "." at the end of serial number (t) of sub-rule (1) of Rule 2 shall be replaced by ";". A new serial number (th) and (d) shall be added after the aforementioned serial number (t) as follows:
   (th) "Board of Directors" means the Board of Directors of the Merchant Banker; (d) "Managing Director/CEO" means the Managing Director/CEO of the Merchant Banker (Chief Executive Officer).

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

Chapter IX
Appointment, Removal, Powers, etc. of Managing Director/CEO

37. Appointment, removal, etc. of Managing Director/CEO.
    (1) The Board of Directors shall appoint a full-time "Managing Director/CEO" subject to the prior approval of the Commission.
    (2) A person appointed as Managing Director/CEO shall not be directly or indirectly involved in any way 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/CEO shall be 3 (three) years, which may be renewed with the prior approval of the Commission; Provided that if a person attains the age of sixty-six years, he/she shall not be eligible for appointment to the post of Managing Director/CEO nor shall he/she continue in the post of Managing Director/CEO. (4) If the Managing Director/CEO fails to perform the duties entrusted to him/her properly, or is found guilty of any misconduct or moral turpitude, the Board of Directors may dismiss or remove him/her (as applicable) subject to the prior approval of the Commission. Provided that such decision must be passed by a vote of at least two-thirds of the members at a special meeting of the Board of Directors convened for this purpose; Provided further that before taking such a decision, he/she must be given a reasonable opportunity to present his/her written and oral views on the matter of the alleged charges. (5) If the Managing Director/CEO 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 is vacant or if he/she is unable to perform duties for any reason, the next higher authority of the concerned Merchant Banker shall perform the interim duties of the Managing Director. (7) If the Board of Directors fails to make an appointment to the post within 90 (ninety) days after the post of Managing Director/CEO becomes vacant, the Commission may, if necessary, appoint a suitable person to this post for the period determined by it. However, the concerned company shall bear the expenses for salary, allowances, and other benefits. (8) The Commission may, from time to time as necessary, issue guidelines regarding the qualifications of the Managing Director/CEO; Provided that the appointment of the Managing Director/CEO of Merchant Bankers formed as subsidiaries of ICB and State-owned Banks (namely Sonali, Rupali, Janata, and Agrani Bank Ltd.) shall be outside the scope of these Rules.

38. Powers of Managing Director/CEO.
    (1) The Managing Director/CEO shall implement all laws, rules, regulations, guidelines, orders, sub-laws, or guidelines/orders issued from time to time by the Commission or the Board of Directors regarding the securities market in the case of the concerned Merchant Banker; Provided that if any guideline or order issued by the Commission and the Board of Directors is contradictory, the guideline or order of the Commission shall be considered final in that case. (2) The Managing Director/CEO shall ensure the compliance of these Rules and supervise the operations of the authorities of the concerned Merchant Banker. (3) The Managing Director/CEO shall be a member of all committees formed 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/CEO. (4) In any special situation, the Managing Director/CEO shall perform/exercise duties/powers not entrusted to him/her, simultaneously informing the Chairman of the Board of Directors and the Commission. However, this must be approved at the next meeting of the Board of Directors. (5) The Managing Director/CEO shall submit reports to the Commission and the Board of Directors as required by the Commission regarding administrative operations and the compliance of all relevant laws, rules, regulations, sub-laws, guidelines, or orders.

By Order of the Securities and Exchange Commission, Professor Dr. M. Khairul Hossain Chairman.