Securities and Exchange Commission (Over-the-

Counter) Rules, 2001

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SECURITIES AND EXCHANGE COMMISSION
(OVER-THE-COUNTER) RULES, 2001
NOTIFICATION
Dated the 12th December, 2001

No. SEC/CMRRCD/2001-16/31/Admin.-03/04-In exercise of the power

conferred by section 33 of the Securities and Exchange Ordinance, 1969
(XVII of 1969), the Securities and Exchange Commission makes, with
prior publication, the following Rules, namely:-

1. Short title.- (1) These rules may be called the Securities and Exchange
Commission (Over-the-Counter) Rules, 2001.

1
[(2) These Rules shall be applicable for the unlisted and delisted or
listed securities deemed to have been delisted by the order of
Securities and Exchange Commission and shall come into force
with immediate effect.]

1
. Inserted by Notification No. SEC/CMRRCD/2001-16/33/Admin/03-42 dated Dhaka,
the 6th April 2010, Published in the Bangladesh Gazette on May 10, 2010.

145
2. Definitions.- (1) In these rules, unless the context otherwise requires,-
(a) “Commission” means the Securities and Exchange Commission
(or in short „SEC‟) established by wmwKDwiwUR I G·‡PÄ Kwgkb
AvBb, 1993 (1993 m‡bi 15 bs AvBb);
(b) “delisted security” means a listed security subsequently delisted
for any reason whatsoever;
(c) “exchange” means a stock exchange established under the
Securities and Exchange Ordinance, 1969 (XVII of 1969);
(d) “listed security” means a security listed with any exchange
under its listing regulations;
(e) “over-the-counter” (or in short „OTC‟) means the facilities
provided by an exchange for the purpose of buying or selling of
unlisted or delisted securities under these rules;
(f) “prescribed” means prescribed under these rules with prior
approval of the Commission;
(g) “stock-dealer/stock-broker” means a stock-dealer or stock-
broker of an exchange who is registered with the Securities
and Exchange Commission under wmwKDwiwUR I G·‡PÄ
Kwgkb (÷K wWjvi, ÷K †eªvKvi I Aby‡gvw`Z cÖwZwbwa) wewagvjv,
2000;
1
[(h) “unlisted security” means a security issued or to be issued by
a company, but not listed with any stock exchange under the
listing regulations.]
(2) Words and expressions used herein and not defined, but defined in
the Securities and Exchange Ordinance, 1969 (XVII of 1969),
wmwKDwiwUR I G·‡PÄ Kwgkb AvBb, 1993 (1993 m‡bi 15 bs AvBb),
the Rules and Regulations made under the said Ordinance and
AvBb, and the †Kv¤úvbx AvBb, 1994 (1994 m‡bi 18 bs AvBb) shall
have the same meanings respectively assigned to them in the said
Ordinance, AvBb, Rules and Regulations.

1
Replaced by Notification No. SEC/CMRRCD/2001-16/44/Admin/03-46 dated June 16,
2010, Published in the Bangladesh Gazette on July 15, 2010.

146
3. Application for availing OTC facilities.- (1) The issuer of an unlisted
or delisted security shall apply to the exchange, as designated by the
Commission, through a stock-dealer/stock-broker in the form
prescribed by the exchange for availing the OTC facilities for buying
or selling of such security on payment of prescribed fee, etc. to the
exchange.
(2) The companies who have not offered securities for public
subscription but have issued securities with the consent of, or
deemed to have obtained consent from, the Commission shall be
eligible for availing OTC facilities subject to the following
conditions:-
1
[(a) the paid-up capital of the companies shall be at least taka
5 (five) crore;]
(b) they are regular in holding annual general meetings; and
(c) there are no accumulated losses.

(3) 2[The Exchange shall also provide OTC facilities to any issuer of
security as directed by the Commission.]

4. Discontinuation, haltage, suspension, etc. of OTC facilities.- (1)

The exchange shall discontinue the OTC facilities for any security at
OTC with effect from the date of listing or relisting of the concerned
security with any exchange; or at the request of the issuer company
concerned - if there remains no public shareholder other than the
sponsor-shareholders in the company.

(2) The exchange, or the Commission, as the case may be, may
discontinue, halt or suspend any time, the buy or sale of any
security at OTC, if it is deemed to be proper in the interest of the
investors and the capital market, after giving an opportunity of
being heard to the issuer company concerned.

1
. Inserted by Notification No. SEC/CMRRCD/2001-16/33/ Admin/ 03-42 dated Dhaka,
the 6th April 2010, Published in the Bangladesh Gazette on May 10, 2010.
2
. Inserted by Notification No. SEC/CMRRCD/2001-16/33/ Admin/ 03-42 dated Dhaka,
the 6th April 2010, Published in the Bangladesh Gazette on May 10, 2010.

147
5. Buy or sale of securities at OTC.-(1) Buy or sale of securities at
OTC shall be conducted by or through a stock-dealer/stock-broker of
an exchange.

(2) The exchange shall prominently display the following in front of

its designated counter, or in its computerized system, as the case
may be, on each working day:
(a) A full list of the securities available at OTC;

(b) Quantity of each security available for sale and the unit price
offered by the seller for disposal along with the last traded
unit price thereof, if applicable.

1
(3) [(a) The selling stock dealer/stock broker shall deposit the
securities with the Exchange at the time of placing the sale order
mentioning details of such securities, including the selling price,
duration of the order, commission and charges separately.
(b) The buying stock dealer/stock broker shall make full payment
to the Exchange through bank cheque/pay order/demand draft
including the commission or charges at the time of placing buy
order of the securities. The buy order shall include the details
of such securities, buying price and duration of the order.]

2
6. [Payment and delivery by the Exchange in case of paper
securities.]-(1) The exchange shall receive, in advance, the securities
at OTC from the selling stock-dealer/stock-broker against issuance of
an official receipt to him mentioning details of such security,
including the selling price, commission or charges separately, for
subsequent payment to the selling stock-dealer/stock-broker after sale
of the concerned securities by the exchange.

(2) The buying stock-dealer/stock-broker shall make full payment,

including the commission or charges, to the exchange through

1
. Inserted by Notification No. SEC/CMRRCD/2001-16/33/ Admin/ 03-42 dated Dhaka,
the 6th April 2010, Published in the Bangladesh Gazette on May 10, 2010.
2
Inserted by Notification No. SEC/CMRRCD/2001-16/33/ Admin/ 03-42 dated Dhaka,
the 6th April 2010, published in the Bangladesh Gazette on May 10, 2010.

148
 bank pay order/demand draft 1[/cheque/cash deposit with the
designated bank account of the Exchange] on the day of buy of
securities at OTC.

(3) The exchange shall deliver the concerned securities to the buying
stock-dealer/stock-broker on the working day following the day of
crediting the amount of the pay order/demand draft 2[/cheque/cash
deposit with the designated bank account of the Exchange] in the
exchange‟s bank account maintained for the purpose.

(4) The buying stock-dealer/stock-broker shall, within three working

days of taking delivery of the concerned securities from the
exchange, deposit the securities with the issuer company for
registering the securities in his name, or in the name of his
customer, as the case may be, and submit a copy of the deposit
receipt thereof issued by the issuer company to the exchange
within the next two working days of issuance of such receipt.
(5) The issuer company shall effect necessary transfer of the deposited
securities in the applicant‟s name and keep ready for delivery of the
securities to the depositor within five working days of its receiving the
securities under intimation in writing simultaneously to the exchange,
the stock-dealer/stock-broker and the applicant concerned.
(6) The exchange shall make payment of the due amount to the selling
stock-dealer/stock-broker by cheque on the first working day
following the receipt of confirmation of transfer of shares from
the issuer company after the sale unless written objection, if any,
along with the acceptable evidence, is received by the exchange
either from the buying stock-dealer/stock-broker or the issuer
company about any defect in the concerned securities.

(7) The selling stock-dealer/stock-broker of the defective securities

shall be liable to make good the losses, if any, sustained by the
buyer in this respect, as determined by the exchange, along with the
interest calculated at 1.5% per month on the value of trade and the

1
Inserted by Notification No. SEC/CMRRCD/2001-16/33/ Admin/ 03-42 dated Dhaka,
the 6th April 2010, published in the Bangladesh Gazette on May 10, 2010
2
Inserted by Notification No. SEC/CMRRCD/2001-16/33/ Admin/ 03-42 dated Dhaka,
the 6th April 2010, published in the Bangladesh Gazette on May 10, 2010

149
 exchange‟s commission or charges, within seven working days of
serving a written notice by the exchange upon the selling stock-
dealer/stock-broker concerned, failure of which the selling stock-
dealer/stock-broker concerned shall be barred from any trading
activities in the exchange under simultaneous intimation to the
Commission.

1
[6A. Payment and Delivery by the Exchange in case of
dematerialized securities.

(1) The selling stock-dealer/stock broker shall send the securities

at OTC Exchange DP through selling DP clearing account
from the selling customer‟s BO account, in advance, against
issuance of an official receipt to the said seller mentioning
details of such security, including the selling price,
commission, or charges separately, for subsequent payment to
the selling stock-dealer/stock broker after sale of the
concerned securities by the Exchange.

(2) The buying stock-dealer/stock broker shall make full payment,

including the commission or charges, to the Exchange through
bank pay order/demand draft/cheque /cash deposit with the
designated bank account of the Exchange on the day of buy of
securities at OTC.

(3) The Exchange shall deliver the concerned securities to the

buying stock-dealer/stock broker‟s clearing account on the
working day following the day of crediting the amount of the
bank pay order/demand draft/cheque/cash in the Exchange‟s
bank account maintained for the purpose.

(4) The buying stock-dealer/stock broker shall, within one

working day of taking delivery of the concerned securities
from the Exchange, deliver the securities to the buyer‟s BO
account under intimation to the Exchange.

1
Inserted by Notification No. SEC/CMRRCD/2001-16/33/ Admin/ 03-42 dated Dhaka,
the 6th April 2010, published in the Bangladesh Gazette on May 10, 2010

150
 (5) The Exchange shall make payment of the due amount to the
selling stock-dealer/stock broker by cheque on the first
working day following the date of transfer of shares from the
buying stock-dealer/stock broker‟s clearing account to the BO
account of the buyer.]

7. Submission of reports, etc.- All rules, regulations, orders and directives

issued in respect of reports, periodicals, price sensitive information, etc. by
the Commission and the exchange shall also be applicable for the security
issuer companies at OTC.

8. Modus operandi for OTC.- The exchange may, with prior written
approval of the Commission, prescribe, from time to time, the modus
operandi for OTC.

9. Penalty for contravention.- Without prejudice to other penal

measures available under any law, contravention of any provision of
these rules shall attract penal provisions under the Securities and
Exchange Ordinance, 1969.

By order of the Securities and Exchange Commission

MANIR UDDIN AHMAD

Chairman.

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