Depository (Operational) Regulations, 2003 (Updated as of 22 August 2021)

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Depository (Operational) Regulations, 2003
Bangladesh Gazette
Extraordinary Number
Published by the Government of Bangladesh
Sunday, May 04, 2003
[Volume 8 -- Private Notices and Notifications Issued by Companies and Other Entities] Securities and Exchange Commission DEPOSITORY (OPERATIONAL) REGULATIONS, 2003 Notification Date, 01 April 2003/18 Chaitra 1409 Bang No.-SEC/CMRRCDI/2001-63/Admin-01/17-In exercise of the powers conferred by Section 17 of the Depositories Act, 1999, and after previous publication, the following regulations are hereby made:

First Chapter
Preliminary

Short title. - These regulations shall be called the Depository (Operational) Regulations, 2003.
Definitions. - (1) Unless the context or subject matter otherwise requires, in these regulations:
(a) "Act" means the Depositories Act, 1999 (Act No. 6 of 1999); (b) "Electronic communication" means any communication system using electronic means including computers; (c) "Sub-law" means the sub-laws of the Depository issued under the Act; (d) "Schedule" means any Schedule annexed to these regulations; (e) "Operations Manual" means the Operations Manual of the Depository; (f) "Person" shall include companies, incorporated bodies, partnership firms, or any other class of institutions; [(g) "Record Date" means any specific date declared by the Issuer, on which the Depository Registrar shall determine the entitlement of registered members to participate and vote in the said Issuer's General Meeting, Extraordinary General Meeting, etc., and to receive declared dividends, rights/bonus shares, and other benefits.] (2) The words used in these regulations which are not defined in sub-regulation (1) shall have the same meaning as assigned to them in the Securities and Exchange Commission Act, 1969 (XX of 1969), the Securities and Exchange Commission Act, 1993 (Act No. 15 of 1993), and the Companies Act, 1994 (Act No. 18 of 1994), along with the rules and regulations made thereunder.

1 Notification No. SEC/CMRRCDI/2001-63/Admin-01/27, dated 20 July 2006, has been inserted, which was published in the Bangladesh Gazette on September 27, 2006.

Declaration of Emergency. -(1) In the event of any special situation (such as earthquake, sabotage, natural disaster, fire, etc.) affecting the control of the Depository, causing disruption or failure of communication, electricity, telephone, or other systems, a depository may declare an emergency after consultation with the Commission.
(2) In the declared emergency, the Depository may temporarily make special arrangements for transaction processes, which must be reported in writing to the Commission immediately (within twenty-four hours).
Arrangements and Procedures for Disaster Management. - Adequate arrangements must be in place to immediately manage disasters arising from technical failures or other causes in the Depository, and the related procedures must be stipulated in the Administration Manual (Operations Manual).
Security of Depository Information. - The Depository shall take all measures, including emergency systems, to ensure that information recorded in the Depository remains completely safe and secure, so that it is not lost or distorted, internal and external (internal and external) data (records) are encrypted, and no one other than those permitted under the Depositories Act, Depository Regulations, these regulations, or the Depository's sub-laws may collect or use such information in any other manner.
Internal Evaluation, Monitoring, and Control Mechanisms. - The Depository shall have adequate internal evaluation, monitoring, and control mechanisms to ensure the safety of its systems, operations, controls, and security.
Arrangements for Retention of Information, Records, etc. - (1) The Depository shall retain the following information, records, etc., in accordance with the procedures prescribed by the sub-laws, among others:
(a) Records of securities that have been dematerialized or rematerialized; (b) Names, addresses, and dates of transfer of transferors and transferees; (c) Lists or indexes of account holders for all securities; (d) Records of all instructions sent to and received from Depository Participants, Issuers, Issuer's Representatives, and Account Holders; (e) Records related to Pledge; (f) Detailed information regarding all participants; (g) Details of securities declared eligible for retention in dematerialized form; (h) Applicable details regarding securities lending and borrowing; and (i) Any other information or records prescribed by the Commission from time to time for retention. (2) The Depository shall inform the Commission in writing in advance of where its information, records, and documents are stored. (3) Subject to the provisions of any other law, the Depository shall retain its information, records, and documents for a minimum of seven years.
Regular Inspection Arrangements. - For proper operation, the Depository shall regularly inspect its systems, operations, controls, and security arrangements, and submit a copy of the inspection report to the Commission.
Arrangements for Retention of Electronic Communication for Business by Depository. - The Depository shall ensure arrangements for the retention of electronic communication for business with the Commission, Security Issuers, Depository Participants, Stock Exchanges, Clearing Corporations or Houses, Clearing Banks, and any other person, firm, or institution directed by the Commission.

Cooperation with Other Persons or Institutions. - The Depository shall cooperate with each Account Holder, Beneficial Owner (where applicable), Depository Participant, Issuer, Issuer's Agent, Custodian of Securities, Clearing Bank, Stock Exchange, Clearing Corporation or House, and any other Depository, as well as any person, firm, or institution directed by the Commission, in such a manner as to ensure reliable, fast, and secure service delivery.
Coordination with Clearing and Settlement Systems. - The Commission shall inform the Depository as soon as possible of any proposal for changes in the clearing and settlement system, and the Depository shall take appropriate steps to quickly coordinate such changes approved by the Commission into its system.
Arrangements for Compensation. - The Depository shall have adequate arrangements to provide legal compensation to any person affected due to the Depository, which may include insurance:
Provided that the insurance company, any of its affiliated organizations, or any of their directors, shareholders, or representatives shall not be included in or remain part of the Depository's board during the term of the insurance.
Prohibition on Delegation of Depository Duties or Responsibilities. - The Depository shall not delegate its depository business to anyone else without the prior approval of the Commission.
Regulations Regarding Winding Up of Depository. - If any Depository wishes to be wound up, it must first submit a written application to the Commission for approval of the winding up, including the following information:
(a) The reason for the winding up of the Depository; (b) A description of how the Depository wishes to be wound up; (c) Details of how the security of securities recorded in the Depository and their custody will be maintained, and what will happen to such securities after the winding up of the Depository; (d) Detailed information on what arrangements will be made for liabilities with the persons or institutions with whom the Depository has entered into contracts regarding securities; and (e) Any other information required by the Commission:
Provided that no Depository may commence formalities related to winding up only after obtaining written approval from the Commission.

Second Chapter
Eligible Securities for Deposit

Eligible Securities for Deposit in Depository. - The Depository shall determine which securities are eligible for and eligible to be deposited in the Depository in dematerialized form, in the manner specified in its sub-laws.
Classification of Eligible Securities. - A Depository may classify eligible securities into the following categories, and, subject to the sub-laws, may determine what type of eligible securities a participant may hold or custody, namely:
(a) Securities listed on the Stock Exchange;
(b) Bonds issued by the Government, Market Securities, or any other securities considered as Market Securities; and (c) Other securities, which may include equity and bond securities, Mutual Fund Units, Commercial Papers, etc.

Eligible Securities for Listing. - (1) After issuing the Business Operation Certificate, the Commission shall determine a specific date within which all or any specific securities listed on the Stock Exchange shall be declared eligible securities. Thereafter, no securities other than those declared eligible securities shall be traded on the Stock Exchange after the date determined by the Commission:
Provided that the Commission may, if it deems necessary, change the said date and grant exemption for any security to be considered an eligible security:
Further provided that after the date the Depository's sub-laws are approved by the Commission, all newly listed securities on the Stock Exchange shall be considered eligible securities, and no trading shall take place on the Stock Exchange other than in dematerialized form. (2) Subject to the provisions of sub-regulation (1), any Stock Exchange shall cease to provide listing facilities for any security that has not been declared an eligible security.
Contract between Depository and Issuer for Deposit in Depository. - The Depository and the Security Issuer shall enter into a contract for deposit in the Depository in the manner prescribed by the Depository's sub-laws:
Provided that in cases where the Depository itself is the Issuer, such a contract shall not be required, but in such cases, the applicable provisions regarding the Issuer shall also apply to the Depository.

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Third Chapter
Account Maintenance

Account Facilities. - The Depository may provide facilities for the following account operations, namely:
(a) Clearing Account - Trading Participants, Custody Participants, Settlement Agent Participants, and Full-Service Participants may use this account for settling transactions on the Stock Exchange. (b) Main Account - Trading Participants, Custody Participants, and Full-Service Participants may use this account for holding their own securities. (c) Client Account - Full-Service Participants and Custody Participants may use this account for holding securities in the name of investors. (d) Joint Account - Full-Service Participants and Custody Participants may use this account for holding accounts of multiple investors together. (e) Direct Account - The Depository may use this account for directly holding securities of investors. (2) The Depository shall have a system by which any account can be identified separately. (3) Each account shall be opened in the manner specified in the sub-laws.

1 Notification No. SEC/CMRRCDI/2001-63/287/Admin-02/8, dated 11 April 2004, published in the Bangladesh Gazette on 16 May 2004, has been deleted.

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Direct Account. - (1) The Depository may open only one direct account in a single name.
(2) The holder of a direct account shall not keep the securities of any other person in their own account.
(3) The Depository may transfer the securities of the holder of a direct account only according to written instructions.
(4) Subject to transactions, the Depository shall provide the holder of a direct account with a monthly statement of the account after any transaction is completed, in which all transactions of securities from the previous statement to the current statement shall be recorded. If there are no transactions, the statement shall be provided on a quarterly basis.
Reconciliation of Accounts. - The Depository and its Participants shall have such systems and arrangements through which accurate reconciliation of securities-related accounts can be made between the Issuer, Depository, and Depository Participants. The Issuer shall reconcile the status of dematerialized securities with the Depository every time a security is included in or removed from its Depository Register.
Contracting with Account Holders by Depository Participants. - Depository Participants shall enter into contracts with all Account Holders in the format prescribed by the Depository's sub-laws.
Opening Separate Accounts for Account Holders by Depository Participants, etc. - (1) Depository Participants shall open separate accounts for all their Account Holders in the manner prescribed by the sub-laws, hold their securities in separate accounts according to them, and shall not mix securities of one account with those of another.
(2) Depository Participants shall transfer securities in their accounts according to instructions received from Account Holders in the format prescribed by the Depository's sub-laws.
Providing Account Statements, etc., by Depository Participants to Account Holders. - Depository Participants shall provide account statements to all their Account Holders at specified intervals, in accordance with the contracts entered into with them and the provisions of the Depository's sub-laws.
Opening Accounts with Depository Participants, etc. -
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[(1) A person wishing to avail services of the Depository may open an account with a Depository Participant of their choice. Upon receipt of the duly completed application form and relevant documents for opening an account as prescribed by the Depository's sub-laws, the Depository Participant shall verify the identity of the applicant, enter all information and signatures of the application form into the system, open the account, and inform the applicant of the account number in writing:
Provided that, except for institutional investors, no one may open more than one account with the same Depository Participant.]
(2) Persons in the individual category and institutional investors shall apply to open the said account with a Depository Participant of their choice by filling out the forms prescribed in the sub-laws, and the Depository Participant shall take immediate arrangements accordingly. (3) An application to close an account held with a Depository Participant shall be made by filling out the forms prescribed in the sub-laws, and the Depository Participant shall take immediate arrangements accordingly:
Provided that if there are any Pledge securities in the relevant account, the account shall not be closed without the prior approval of the pledgee.

1 Notification No. SEC/CMRRCDI/2001-63/Admin-01/27, dated 20 July 2006, has been replaced, which was published in the Bangladesh Gazette on September 27, 2006.

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Fourth Chapter
Depository Participants

Registration of Depository Participants. - (1) No one may work as a Depository Participant without obtaining a Registration Certificate under these regulations.
(2) For registration as a Depository Participant:
(a) An application must be made to the Commission through the Depository in the form provided in Schedule-1, along with the recommendation of the Commission-certified Depository;

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[(b) The prescribed fee for the application mentioned in the said form must be deposited with the Commission through Pay Order, Bank Draft, or Electronic Fund Transfer in the following amounts:
For Custody Participants --------------------- Tk. 2,00,000 For Trading Participants ----------------------- Tk. 50,000 For Other Participants ---------------------- Tk. 1,00,000.] (c) The Depository, after filling in the specified parts of the received application, shall submit it to the Commission within seven working days, along with the said Bank Draft or Pay Order; (d) If the Depository determines for any reason that an application cannot be recommended to the Commission for registration, it shall inform the applicant in writing within seven working days, stating the reasons, and send a copy thereof, along with the received Draft or Pay Order, to the Commission:
Provided that if the application was not recommended to the Commission for the reason stated, the applicant may re-apply after removing the said reason, and in that case, no fee need be paid again.

Eligibility for Registration as a Depository Participant. - Any person shall be eligible for registration as a Depository Participant under these regulations if:-(1) The applicant belongs to any one of the following categories, namely:
(a) Any financial institution defined in the Financial Institutions Act, 1993 (Act No. 27 of 1993); (b) Any bank company defined in the Bank Companies Act, 1991 (XX of 1991); (c) Any insurance company defined in the Insurance Act, 1938 (X of 1938); (d) Any company formed under the Companies Act, 1994 (Act No. 18 of 1994) or any other incorporated or registered body established or formed under any other law; (e) Any Clearing Corporation approved by the Commission, Clearing House of a Stock Exchange; (f) Any Corporate Stock Dealer, Stock Broker, Merchant Banker, Asset Manager, Custodian, or any other capital market intermediary certified by the Commission:
Provided that in the case of Stock Dealers or Stock Brokers, their paid-up capital must be at least Twenty-Five Lakh Taka, of which at least 75% must be held as liquid net assets:
Further provided that the above provision shall not apply in the case of Stock Dealers or Stock Brokers wishing to become Trading Participants:
Further provided that in the case of Dealers or Stock Brokers, the eligibility regarding Corporates mentioned in clause (f) of sub-regulation (1) of Regulation 28 shall be subject to the relevant rules mentioned in the Securities and Exchange Commission (Stock Dealers, Stock Brokers and Approved Representatives) Rules, 2000; (g) Any other institution determined by the Commission from time to time for this purpose; and (2) The applicant has the infrastructure, security arrangements, and suitable manpower prescribed by the Depository's sub-laws.

1 Notification No. BSEC/CMRRCDI/2019-392/26/Admin/126, dated 30 June 2021, has been replaced, which was published in the Bangladesh Gazette on August 22, 2021.

Furthermore, provided that in the case of Dealers or Stock Brokers, the provisions of Regulation 28, clause (f) of sub-regulation (1), regarding Corporate eligibility shall be subject to the relevant rules mentioned in the Securities and Exchange Commission (Stock Dealers, Stock Brokers and Approved Representatives) Rules, 2000;

Classification of Depository Participants. - A Depository may classify participants into the following categories, subject to the sub-laws, namely:
(a) Trading Participants - Only Stock Dealers or Stock Brokers may be participants of this category and may operate clearing accounts for settling transactions on the Stock Exchange along with operating their own accounts. (b) Full-Service Participants - Participants of this category may operate their own accounts, clearing accounts, and investors' accounts. (c) Custody Participants - Participants of this category may operate their own accounts, client custody accounts, and clearing accounts for Stock Brokers or Stock Dealers. (d) Settlement Agent Participants - Participants of this category must be approved by the Commission and may operate accounts only for providing services for settling transactions conducted on the Stock Exchange by Commission-certified Stock Brokers or Stock Dealers.
Registration as a Depository Participant. - (1) Upon receiving an application for registration as a Depository Participant, if the Commission is satisfied that the application is eligible for approval under these regulations, it shall approve the application within ten working days of receipt and issue a Registration Certificate in the form provided in Schedule-2 in favor of the applicant.
(2) If more information is required to consider an application for registration, the Commission may request the said information within seven days of receiving the application; and upon receiving the said information within the time determined by the Commission, if the application is found acceptable, the Commission shall approve it and issue a Registration Certificate in favor of the applicant within ten working days of receiving the additional information 1 [: ] 2 [Provided that the prescribed fee for registration must be deposited with the Commission through Pay Order, Bank Draft, or Electronic Fund Transfer in the following amounts:
For Custody Participants --------------------- Tk. 5,00,000 For Trading Participants ----------------------- Tk. 1,00,000 For Other Participants ---------------------- Tk. 2,00,000.] (3) Upon reviewing an application for registration, if the Commission comes to the conclusion that the application is not eligible for approval under these regulations, or that approving it would not be conducive to the capital market or public interest, it may reject the application in writing, stating the reasons, within ten working days of its receipt, or within ten working days of receiving additional information under sub-regulation (2):

1 Notification No. BSEC/CMRRCDI/2019-392/26/Admin/126, dated 30 June 2021, has replaced [:] with [:}, which was published in the Bangladesh Gazette on August 22, 2021.
2 Notification No. BSEC/CMRRCDI/2019-392/26/Admin/126, dated 30 June 2021, has been replaced, which was published in the Bangladesh Gazette on August 22, 2021.

Provided that the applicant may re-apply to the Commission through the Depository after removing the said reasons.

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[(4) Any Registration Certificate issued by the Commission shall remain valid for (a) five years in the case of Custody Participants, and (b) one year in the case of Trading and Other Participants, from the date of issuance subject to the conditions stated therein.] (5) If any information provided by the Depository Participant changes subsequently, it must immediately inform the Depository and the Commission in writing.

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[(6) In every case, an application in the form provided in Schedule-3 through the Depository, along with the prescribed renewal fee deposited with the Commission through Pay Order, Bank Draft, or Electronic Fund Transfer, may be submitted to renew the Registration Certificate for (a) five years in the case of Custody Participants, and (b) one year in the case of Trading and Other Participants:
For Custody Participants --------------------- Tk. 5,00,000 For Trading Participants ----------------------- Tk. 1,00,000 For Other Participants ---------------------- Tk. 2,00,000.] (7) The application for renewal of the Registration Certificate mentioned in sub-regulation (6) must be submitted to the Commission one month prior to the expiry of the period mentioned in the Registration Certificate; otherwise, a fine of 3 [Tk. 5,000 per day] must be deposited with the Commission for each day of delay.

Contract with Clients. - (1) In the case of maintaining client accounts and joint accounts by Participants, there must be a written contract with each client.
(2) The type of such contract shall be determined by the Depository's sub-laws.
Control over Accounts by Depository Participants. - (1) Securities of clients must be held separately from the securities of Participants, except for securities held in the Clearing Account.
(2) Trading Participants, Custody Participants, Settlement Agent Participants, and Full-Service Participants may open Clearing Accounts for settling transactions according to the sub-laws. (3) Full-Service Participants and Custody Participants may open accounts in the name of investors and, subject to mutual agreement, joint accounts. (4) Settlement Agent Participants may open Clearing Accounts for their clients, i.e., Stock Brokers or Stock Dealers. (5) Securities must be transferred from the client's account to the Clearing Account by Stock Brokers or Stock Dealers only after receiving a sell order from their clients. If the sell order is executed, it must be transferred to the Clearing Account before the end of the working day. If the sell order is cancelled, it must be transferred back from the Clearing Account to the client's account before the end of the working day:

1 Replaced by No.-SEC/CMRRCDI/2001-63/Admin/01-38, dated 11th March 2009.
2 Notification No. BSEC/CMRRCDI/2019-392/26/Admin/126, dated 30 June 2021, has been replaced, which was published in the Bangladesh Gazette on August 22, 2021.
3 Notification No. BSEC/CMRRCDI/2019-392/26/Admin/126, dated 30 June 2021, has been replaced, which was published in the Bangladesh Gazette on August 22, 2021.

Provided that, the provisions of the existing rules applicable to them shall apply to registered custodial service providers from the Commission.

(6) Transactions made through the stock exchange shall be settled in accordance with the settlement rules.

(7) Participants shall maintain details regarding the true ownership of clearing and pooled accounts at all times and shall be obliged to provide them to the Depository or the Commission upon request.

Maintenance of electronic connectivity, etc., by Depository Participants.- A Depository Participant shall ensure the maintenance of electronic connectivity arrangements with the Depository, in the manner prescribed in the sub-rules, with the Depository of which it is a participant.
Maintenance of information, records, etc., by Depository Participants.- (1) A Depository Participant shall have arrangements for internal evaluation and inspection to ensure the maintenance of appropriate information, records, etc., in the manner prescribed by the sub-rules.

(2) A Depository Participant shall reconcile its records with the Depository every business day.

(3) A Depository Participant shall submit returns (in the prescribed format) to the Depository at specified intervals, in the manner prescribed in the sub-rules.

(4) Every Depository Participant shall provide information specified in the demand letter to the Commission upon request.

(5) A Depository Participant shall keep and make available for inspection and examination by the Commission, the Depository, or any person or institution directed by the Commission, among others, the following information at all times, namely:-

(a) Information regarding every transaction of the Depository and the account holder; (b) All records regarding immobilized (immobilized) and dematerialized securities conducted through the Depository Participant; (c) All instructions received from each account holder and copies of statements sent to them; and (d) All information regarding pledges.

(6) A Depository Participant shall inform the Commission and the Depository in writing in advance of the location where it stores its information, records, etc., and shall inform the Commission and the Depository in writing immediately of any change thereto.

(7) Subject to the provisions of any other applicable law, a Depository Participant shall maintain its information, records, and documents for a minimum of seven years.

Separate maintenance of information by participants of multiple Depositories.- If a person is a participant of multiple Depositories, the information, records, etc., mentioned in Rule 34 shall be maintained separately for each Depository.
Inspection of business of Depository Participants.- A Depository Participant shall be obliged to allow any authorized person appointed by the Commission or the Depository to enter its workplace at any time and inspect its business, records, etc.
Prohibition on outsourcing business of Depository Participants.-

No Depository Participant shall outsource its business as a Depository Participant to any other person without the prior approval of the Depository.

Chapter Five
Immobilization or Dematerialization of Securities

Deposit, etc., for immobilization of securities.- (1) When a Depository declares a security eligible for immobilization, the owner of such security may deposit it with the Issuer to immobilize the security in its own name in a Depository or an account opened with a Depository Participant, or if it is a Custodian, in the name of its client.

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[(2) In the case of immobilization of securities, except for pooled accounts, securities in a single name shall be included in a corresponding single-name Depository account, and securities in joint names shall be included in a corresponding joint-name Depository account.

(3) In the case of initial share allocation through IPO, except for pooled accounts, applications made in a single name shall be included in a corresponding single-name Depository account, and in the case of joint name applications, they shall be included in a corresponding joint-name Depository account.]

Change of immobilized securities to dematerialized status.- Subject to the provisions of the sub-rules, anyone who wishes may change the immobilized securities deposited in their account back to dematerialized status.
Process of immobilization and dematerialization of securities.- The process of immobilization and dematerialization of securities shall be prescribed by the sub-rules.

Chapter Six
Transfer of Ownership of Securities

Assurance of payment of consideration in case of transfer of ownership of securities.- The Depository shall ensure that there is a mechanism through which, in the case of stock exchange transactions of securities, the ownership of the security shall be transferred only after the assurance of payment of consideration, where applicable.
Transfer of ownership of securities from one account to another other than stock exchange transactions, etc.- (1) A Depository Participant shall not transfer any security without the written consent of its account holder.

(2) If an account holder or any individual account holder wishes to transfer securities from their account to another account, they shall fill out the form prescribed in the sub-rules and submit it to the Depository Participant or the Depository, along with the approval letter of the stock exchange or the Commission, where applicable. The Depository Participant or Depository shall immediately verify the authenticity of the information provided in the said form and, if found correct, record it in their system.

(3) If an account holder or any individual account holder wishes to transfer securities within their account, they shall fill out the form prescribed in the sub-rules and submit it to the Depository Participant or Depository for transfer, and the Depository Participant or Depository shall record it in their system.

(4) Anyone who wishes may give instructions to the Depository Participant for the transfer of securities for a specific time or for all times, and in that case, they shall not be required to fill out the form prescribed in the sub-rules every time.

(5) When the transfer and transmission orders of securities coincide, the securities shall be immediately transferred and transmitted from one account to another through an automatic process.

(6) If the Depository is unable to transfer or transmit a security due to incorrect recording, in that case, until the investigation or inquiry into this matter is completed, the Depository shall deposit it in a temporary account.

1 Notification No. SECMRRCD/2001-63/Admin-01/27, dated 20 July 2006, inserted, published in the Bangladesh Gazette on September 27, 2006.

(7) If an account holder or any individual account holder dies, their legal heir shall apply to the Depository Participant or Depository where the securities are received, by filling out the form prescribed in the sub-rules for transmission (transmission). In the case of the account holder, the participant, and in the case of the individual account holder, the Depository shall perform the transmission work after verifying the necessary documents.

Supply of information to Issuer regarding registered owners in Depository Register.- (1) Every Depository shall regularly supply information regarding the ownership of securities registered in the Depository Register (name, address, number of securities, etc.) to the Issuer through the system for sending half-yearly reports, annual reports, sending cash or stock dividends, filing returns to the Register, etc., and the Issuer shall work according to the said information.

(2) The procedure regarding the exchange of information shall be prescribed by the sub-rules.

Chapter Seven
Provision of Other Facilities

Pledge facility.- (1) A Depository or a Depository Participant may provide pledge facilities to its clients.

(2) For the pledge, if the pledge request form (Pledge Request Form) provided in the sub-rules of the Depository is submitted with the consent of the Pledgor and Pledgee, the Depository or Depository Participant shall process the pledge.

(3) While the pledge exists, it shall be recorded in the name of the Pledgor in the Depository's account.

(4) The securities kept in pledge may be transferred according to the instructions of the Pledgee, in the manner prescribed by the sub-rules.

Facility regarding lending and borrowing of securities.- Subject to the prior approval of the Commission and the provisions of the rules issued by the Commission regarding lending and borrowing of securities, the Depository may provide facilities regarding lending and borrowing of securities.
Issue of Bonus and Rights Shares.

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[(1) If any Issuer whose securities are kept in the Depository issues any bonus or rights shares, the allocation of such securities shall be included in the Depository through the system, which shall be processed after verifying the written instructions of the Issuer received with the relevant documents.

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(2) In the case of eligible declared securities (where the securities of all companies are traded in immobilized status in the stock exchange), the Issuer shall declare a Record Date (Record Date) on a specified date (one day) after the Book Closure instead of the declared date for declaration (such as dividend, rights issue, etc.), and all shareholders whose names are included in the Depository Register at the end of the business day of the said Record Date shall be entitled to receive dividends, rights shares, etc., according to the declaration.

(3) No transaction of the relevant securities shall take place in the stock exchange on the Record Date.

(4) The settlement cycle closest to the stock exchange Record Date shall arrange only for spot trades.

(5) No Depository Participant shall keep the relevant securities in its clearing account on the Record Date.

1 Notification No. SECMRRCD/2001-63/Admin-01/27, dated 20 July 2006, renumbered, published in the Bangladesh Gazette on September 27, 2006.
2 Notification No. SECMRRCD/2001-63/Admin-01/27, dated 20 July 2006, inserted, published in the Bangladesh Gazette on September 27, 2006.

(6) No broker or dealer shall keep the relevant securities in its clearing account on the Record Date.

(7) During the issue of rights or bonus shares, the Issuer shall request in writing all shareholders whose Depository accounts (IG Accounts) are not known to the Issuer to submit their Depository accounts (IG Accounts) to the Issuer within a specified time. However, if the Depository account of any shareholder is not received by the Issuer within the specified time, the Issuer may keep it in an open temporary account (Open Account) until the shareholder provides the Depository account.

(8) In the case of rights or bonus issue, one whole share shall be included in the Depository account of the relevant shareholder. However, in the case of a fraction of a security (less than 1, such as 0.75 or 0.25, etc.), all fractions shall be aggregated and included in a Depository account opened in the name of the Company Secretary as whole shares, and the proceeds from selling such securities in the stock exchange, after deducting expenses, shall be distributed proportionally among the relevant shareholders (within the limit of dividend payment).]

Distribution of Dividends.- Upon request by the Issuer, the warrants of its declared dividends may be distributed through the Depository. However, in that case, the responsibility for timely distribution of dividends and reporting to the Commission after the distribution of dividends shall remain with the Issuer as usual.

Chapter Eight
Miscellaneous

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[48. Compliance with Orders or Instructions.- Orders or instructions issued from time to time under these Regulations and the compliant provisions mentioned in these Regulations shall be considered as orders or instructions and compliant provisions issued under the Depositories Act, 1999.

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[48A. Fees for Services Provided by Depository.- The Depository may collect fees listed in Schedule-'4' for the services it provides:
Provided that, if any other charges [such as cost reimbursement (Cost Reimbursement), deposits (Deposits), etc.] are to be collected, they shall be determined by the sub-rules.

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[48B. Payment of Fees, etc., to the Commission.- Various fees, etc., payable to the Bangladesh Securities and Exchange Commission may be paid through Pay Order, Bank Draft, or Electronic Fund Transfer.]]

Inspection for the general public.- During the working hours of the Depository office, the following information, documents, etc., shall be kept ready for public inspection, namely:-

(a) List of eligible securities;
(b) Name, address, and telephone number of Depository Participants; (c) Depositories Act, Depository Regulations, Sub-rules, Manual, etc.; (d) Depository Register; and (e) Any other information, documents, etc., directed by the Commission.

1 Notification No. SECMRRCD/2001-63/Admin-01/27, dated 20 July 2006, inserted, published in the Bangladesh Gazette on September 27, 2006.
2 Notification No. SECMRRCD/2001-63/Admin-01/27, dated 20 July 2006, renumbered, published in the Bangladesh Gazette on September 27, 2006.
3 Notification No. BSEC/CMRRCD/2019-392/26/Admin/126 dated 30 June 2021 inserted, published in the Bangladesh Gazette on August 22, 2021.

Complaints and Resolution.- The Depository shall properly record all complaints filed before it and take immediate appropriate measures to resolve the complaints.
Submission of Reports to Commission.- (1) The Depository shall submit the following reports to the Commission, among others, namely:-

(a) Details of transfer of ownership of securities other than stock exchange transactions on the previous business day - by the middle of the next business day; (b) Details of non-settlement of stock exchange transactions due to the transferor not having securities in their account on the previous business day - by the middle of the next business day; (c) Details of any disciplinary action taken against any participant - by the middle of the next three business days; (d) Reports regarding immediate notification of any system failure; and (e) Half-yearly reports of the Depository - by the middle of the next one month, and annual financial details - by the middle of the next three months.

(2) If the Commission asks for any other information from time to time, the Depository shall be obliged to provide it according to the Commission's instructions.

Rights and duties of Depository and others.- The rights and duties of the Depository, Depository Participants, Issuers, and agents of Issuers shall be determined through legal agreements concluded between the Depositories Act, Depository Regulations, these Regulations, the Depository's sub-rules, and relevant parts:
Provided that, in case of any problem arising in this regard, the decision of the Commission given in this regard shall be considered final.

1
[53. Penalty.- The Commission may, in addition to the penalties prescribed by law, take disciplinary measures such as cancelling or suspending the operation of the relevant registration certificate for violation of any provision of these Regulations or any instruction issued thereunder, or for violation of the Code of Conduct prescribed in Schedule-5 or any provision of the sub-rules against the person under investigation by the Commission:
Provided that, no disciplinary action shall be taken against the relevant person without providing an opportunity of hearing with reasons recorded:
Further provided that, an aggrieved person may appeal against the decision of the Commission to the Commission under the Securities and Exchange Commission (Appeal) Regulations, 1995, which shall be decided according to the said Regulations. Further provided that, if the registration certificate of any Depository Participant is suspended or cancelled by the Commission, the Depository shall immediately disconnect its connectivity with the participant upon receipt of the order. If a registration certificate suspended or cancelled Depository Participant is a member of any stock exchange, in that case, the said stock exchange, and in other cases, the Depository, shall take over the business of the said cancelled/suspended Depository Participant for the purpose of transferring securities held in various Depository accounts of investors to another participant through an open link (Open Link).]

Publication of English Translation as Authentic.- After the enactment of these Regulations, the Commission shall publish an authentic translation of these Regulations in English by notification in the Bangladesh Gazette, which shall be known as the Authorized English Text:
Provided that, in case of conflict between these Regulations and the said English text, these Regulations shall prevail.

1 Notification No. SECMRRCD/2001-63/Admin-01/27, dated 20 July 2006, replaced, published in the Bangladesh Gazette on September 27, 2006.

Schedule-1
[Rule 27, Sub-rule (2)]
Application for Registration as Depository Participant [If the applicant is a Statutory Institution, Bank or Insurance Company, Stock Dealer or Stock Broker, only providing information serial numbers 1 to 7 shall suffice.]

Name of the Applicant:
Address of the Applicant:
[If the address is changed, it must be informed in writing to the relevant Depository and Commission within three business days]
The Depository of which the Applicant wishes to become a Depository Participant-
(a) Name and Address:
(b) Code No.:
(c) Date of Code Issuance:
Class of Service for which the Applicant is applying for Certificate: ------Participant
Legal Status of the Applicant: Company/Statutory Institution
(Cross out if not applicable. If Statutory Institution, Bank or Insurance Company, attach a certified copy of the relevant Act/Registration Certificate and audited annual statement).
Authority of the Applicant:
Name of the person and description of power given (DO NOT submit a copy of the Power of Attorney).
Applicant's
(a) Office Phone, Fax:
and E-mail No.-
(b) Principal Executive:
Home Phone, Fax, E-mail No.:
If the Applicant is a Company, details of the Company's:
Names and addresses of Directors and details of other companies/institutions where ownership or business relationships exist
Applicant's experience in securities business (if any):
Applicant's Net Capital Position (as on.........date):
[DO NOT submit audited financial statements]
Is the Applicant a Merchant Banker,
Portfolio Manager, Trustee of Mutual

Fund, Custodian or
Asset Management Company?
12. Has any member of the Applicant or its Board of Directors ever been convicted of any criminal offense involving fraud, deceitful or dishonest activities? If so, when, where, and for what offense?
13. Has any member of the Applicant or its Board of Directors ever been declared insolvent or bankrupt by a court? If so, when, where?
14. Is any member of the Applicant or its Board of Directors a defaulter of any bank loan? If so, which bank and how much money?
15. Of the Applicant's Authorized Representative (if any)-
(a) Name
(b) Father's Name
(c) Permanent Address
(d) Current Address
(e) Office Address
(f) Educational Qualification
16. Number of Employees of the Applicant:
17. Other Information:

I hereby declare that the information provided above is true and correct to the best of my knowledge and belief.

For....................
Date..........................
...................................
Signature and Seal of the Applicant

Recommendation/Comment of the Depository
Date:.............................. ..............................................
Signature and Seal of the Principal Executive Officer

Schedule-2
[Rule 30, Sub-rule (1)]
Registration Certificate of Depository Participant Securities and Exchange Commission Registration Certificate of Depository Participant
Registration Certificate No. .............. Date of Issuance.......................
Under Rule 30 of the Depository (Operational) Regulations, 2003, the Securities and Exchange Commission hereby grants this Registration Certificate to...................................... (Name) ..................................... Address ................................... to work as a registered...................... Participant of (Name of Depository). This Registration Certificate shall remain valid until......................... Date and thereafter it may be renewed in the specified format provided at the back of this certificate.

For Securities and Exchange Commission
(Signature of the Issuing Officer)
Name: .............................
Designation: .............................
Seal

Renewal of Certificate
Registration Certificate No........................... Date...........................
Until Date
Renewed
Changed Address,
Legal Status, etc.
(If applicable)
Signature and Seal of the Renewing Officer

Schedule-3
[Rule 30, Sub-rule (6)]
Renewal of Registration Certificate of Depository Participant Application for Renewal of Registration Certificate of Depository Participant

Name and Class of Participant:
Registration Certificate No.:
Date of Issuance, Last Renewal
and Expiry Date:
Changed Address (if any):
(a) Permanent
(b) Current
(c) Office
(d) Telephone, Fax, E-mail No.
Brief description of any structural or legal changes in the characteristics of the Participant's establishment:
(If any change has occurred, a copy of the change must be informed in writing to the relevant Depository and Commission within three business days).
I hereby declare that the information provided above is true to the best of my knowledge and belief.
....................For
Date:.................... ..........................
Signature and Seal of the Applicant

Recommendation of the Depository:
It is hereby confirmed that .................................................. (Name),
Address..................................................................... is a .........................................
Participant of this Depository.
The Securities and Exchange Commission has recommended the renewal of his registration certificate........................... until Date.
Date:......................... ...............................................
(Signature and Seal of the Principal Executive Officer)

1
[Schedule-4
[Rule 48]
Fees for Services Provided by Depository
Sr. No.
Fee Head
Fee Rate
Minimum Fee
(Taka)
Basis for Fee Determination
When Payable

Immobilization (Immobilization) Fee
5.00
Nominal Value of Security
Participant
End of Month
(a) Equity
Securities/Close-End
Mutual Fund
Taka
0.000.15
(b) ETF Taka
0.000075
(c) Open-End
Mutual Fund
Taka
0.000075
(d) Corporate
Bond/Debenture and other
Fixed-Income
Securities
Taka
0.000075
(e) Government
Securities
Taka 0.00
(f) Small-Cap
Platform Listed
Securities
Taka
0.000030

1 Notification No.-SECMRRCD/2001-63/189/Admin/70, dated 4 August 2016 replaced, published in the Bangladesh Gazette on 24 September 2016.

Sr. No.
Fee Head
Fee Rate
Minimum Fee
(Taka)
Basis for Fee Determination
When Payable
2. Transaction
(Transaction) Fee
(a) Equity
Securities/Close-
End
Mutual Fund
Taka 0.000125
Taka 0.000075
(In case of transaction by Market Maker)
------- Market Value Participant/
Account Holder
End of Month
(b) ETF Taka 0.000125
(In case of Secondary Market
ETF Unit transactions, except AP)
Market Value Participant/
Only Buyer
(Investor)
Account Holder
Same
Taka 0.00 (In case of creation and redemption of units in AP's own account) Taka 0.00 (In case of transfer or settlement of underlying securities of ETF units in AP's own account) Taka 0.00 (In case of transfer of underlying securities of ETF units in AP's client account during fund formation) Net Asset Value

Sr. No.
Fee Head
Fee Rate
Minimum Fee
(Taka)
Basis for Fee
Determination
Payable
By
When Payable
Taka 0.000125 (In case of creation of units in AP's client account) Taka 0.00 (In case of redemption of units in AP's client account) Taka 0.00 (In case of transfer of underlying securities of ETF units in AP's client account) Taka 0.00 (In case of transaction by Market Maker) (c) Open-End Mutual Fund Taka 0.000125 (Only in case of purchase, not in case of surrender) ---- Nominal Value Participant/ Only Buyer (Investor) Account Holder End of Month (d) Corporate Bond/Debenture and other Fixed-Income Securities Taka 25.00 ----- Per Transaction Participant/ Account Holder Same (e) Government Securities Taka 10.00 ----- Per Transaction Participant/ Account Holder Same (f) Small-Cap Platform Listed Securities Taka 0.00003 Taka 0.00 (In case of transaction by Market Maker) ---- Market Value Participant/ Account Holder Same

Sr. No.
Fee Head
Fee Rate
Minimum Fee
(Taka)
Basis for Fee
Determination
Payable
By
When Payable
3. Annual
Accounting Fee
Depository (BO) Account
Annual Accounting Fee per Depository (BO) Account 450/-Taka, of which Depository (BO) Account per 250/-Taka rate, Depository shall pay to Commission. Of the said 250/-Taka, 200/-Taka shall be deposited to the Government Treasury. From the remaining 200/-Taka, Depository shall receive 100/-Taka and Depository Participant shall receive 100/-Taka. ---- ---- Participant Account Holder/ Pooled (Combined) Account Every Investor Annual Advance (For non-payment of Annual Accounting Fee, Depository Participant or Depository shall close accounts where no securities are kept. If securities are kept in any account, the Depository Participant or Depository shall suspend the account until the fee (plus any additional fee applicable) is paid.)
4. Depository
Connectivity Fee
Monthly Taka 500.00 ---- For First
Connectivity
Monthly
Fixed Fee
Participant/ Issuer
Monthly Advance
5. Depository
Additional
Connectivity Fee
Monthly Taka 5000.00 ---- For Each
Additional
Connectivity
Monthly
Fixed Fee
Same Same

Serial No.	Fee Item	Fee Rate	Minimum Fee (Taka)	Basis for Fee Determination	Payee	When Payable
6.	Issuance Fee on the Nominal Value (Face Value) of Issued Eligible Securities: (Taka)
	Up to Five Crore Taka	Five
	Above Five Crore Taka up to Twenty Crore Taka	Twenty
	Above Twenty Crore Taka		Per Eligible Security	Specified Fee	Issuer	In Advance
(a) Equity Securities/Close-End Mutual Fund	25,000.00	0.00	50,000.00	1,00,000.00
(b) ETF	----	----	40,000.00
(c) Open-End Mutual Fund	------	------	20,000.00	40,000.00
(d) Corporate Bond/Debenture and other Fixed-Income Securities	5,000.00	10,000.00	20,000.00
(e) Government Securities	5,000.00
(f) Small-Cap Platform Listed Securities	5,000.00	10,000.00	20,000.00

Serial No.	Fee Item	Fee Rate	Minimum Fee (Taka)	Basis for Fee Determination	Payee	When Payable
7.	New Issue/IPO (Wash) Fee	Taka 0.00015	-----	Issue Value	Issuer	With Application/End of Month
8.	Repurchase (Buyback) Fee	Taka 0.10	Taka 100.00	Per Security	Participant/Direct Account Holder	End of Month
9.	Documentary (Documentation) Fee	Taka 2,500.00	---	One-time, Specified	Participant/Issuer	At the time of Account Opening
10.	Application Fee for Statement/Statement Verification (Audit Trail) Fee	(a) Taka 5.00 per copy<br>(b) Fee Free		Per Page	Account Holder	With Application
11.	SMS Alert Fee for Immediate Notification to Account Holder upon Security Debit/Credit from Depositary BO Account	Free		Regular

Explanation: The "Government Securities" mentioned in this schedule refers to the Government Securities Act, 1969 (Act No. XXVI of 1969), Section 2, Sub-section (1), Clause (a).

[Schedule-5
[Rule-53]
Code of Conduct for Depositary Participants

Integrity, Efficiency, etc. - Every depositary participant shall maintain reputation, efficiency, trustworthiness, and integrity in conducting its business and related activities.
Duty towards Clients. - (1) Every depositary participant shall act only on the written instructions of its clients in accordance with the provisions of this sub-rule.
(2) Every depositary participant shall provide account statements to its clients at specified intervals.
(3) Every depositary participant is responsible for the proper preservation of its clients' securities and shall be liable to compensate the client if the securities are properly preserved but lost due to negligence.
Duty towards the Commission. - Every depositary participant shall submit all books, registers, reports, deeds, or other documents in accordance with the instructions of the Commission or any committee authorized by it, provide all kinds of cooperation to the investigator or inspector during investigation or inspection, and shall not submit any false or misleading information or documents in this regard.
Reporting Suspicious Activities. - Every depositary participant shall immediately inform the depositary and the Commission in writing upon becoming aware of any suspicious activity.
Resolution of Complaints. - If a client makes a written complaint to the depositary participant, it shall be resolved immediately.]

Secretary to the Securities and Exchange Commission Monir Uddin Ahmed Chairman

1 Inserted by Notification No. SEC/CMMRCDI/2001-63/Admin-01/27, dated July 20, 2006, which was published in the Bangladesh Gazette on September 27, 2006.

Depository (Operational) Regulations, 2003 (Updated as of 22 August 2021)

1 Inserted by Notification No. SEC/CMMRCDI/2001-63/Admin-01/27, dated July 20, 2006, which was published in the Bangladesh Gazette on September 27, 2006.

Lineage: In force