Chapter 11
Punishment
Rule-81 : 1[ Consideration of provisions of rules as order- Provisions to be followed in these regulations shall be considered as directives or orders to be followed given under Securities and Exchange Commission Act, 1993.
Provided that the Commission can time to time issue other directives or orders under these rules.
Rule-82 : Punishment and its reason-1) If anybody-
a) Fails to obey any condition of granting of registration under these rules, or
b) Violates any provision of Act or these rules;
Any punishment mentioned in sub-rule (2) will be imposed on him.
2) Punishments that can be imposed as per sub-rule (1) are as follows, namely-
a) Penalty and punishment as determined in Act;
b) Suspension of registration for a definite period, which will be not more than one year;
c) Cancellation of registration;
d) Prohibition to adopt any other Scheme;
e) Prohibition to work as Trustee, Asset Management Company or Custodian in any other Mutual Fund;
f) Prohibition to form any other Mutual Fund.
Rule-83 Suspension of Registration of a Mutual Fund- Punishment of suspension of registration of a Mutual Fund will be imposed, if-
a) That Mutual or its Trustee, Asset Management Company or Custodian violates Act or any provision of these rules;
b) That Mutual or its Trustee, Asset Management Company or Custodian
i) Fails to submit any information about its own work as per these rules;
ii) Gives any erroneous or false information;
iii) Does not give reports as per these rules;
iv) Does not co-operate in any inspection conducted by the Commission;
c) That Mutual Fund cannot solve any complain lodged by the Entrepreneurs or cannot give satisfactory reply to the Commission regarding that;
d) That Mutual Fund does fraudulent activities ;
e) That Mutual Fund misbehaves or shoes unbusinessmanly and unprofessional behaviour ;
f)That Mutual Fund fails to pay fees payable under these rules;
g) That Mutual Fund violates any condition of registration;
h) The Entrepreneur, Trustee, Asset Management Company or Custodian of that Mutual
Fund does not carry out its responsibilities mentioned in these rules.
1 Has been substituted by the circular published in Bangladesh Gazette dated April 5, 2006 .
Rule-84 : Cancellation of registration of Mutual Fund- Punishment of cancellation of registration of a Mutual Fund will be impose, if-
a) That Mutual Fund or its Asset Management Company does fraud intentionally which is against the interest of the Capital Market or the Entrepreneurs.
b) The financial condition of that Mutual Fund deteriorates such that as per opinion of the Commission, it is not favourable for the interest of the Entrepreneurs;
c) That Mutual or its Entrepreneurs, Trustee, Asset Management Company or Custodian has been punished under criminal offence.
Rule-85 : Investigation – Without performing investigation under rule-86, no order for suspension or cancellation of registration of any Mutual Fund, , Trustee, Asset Management Company or Custodian will be given.
Rule-86 : Process of performing investigation-1) For performing investigation under rule-85 the Commission will appoint one or more investigation officer.
2) The investigation officer will serve notice on the concerned Mutual Fund and its Entrepreneurs, Trustee, Asset Management Company and Custodian relating to investigation in their registered office or in the main place of business.
3) The concerned Mutual Fund and its Entrepreneurs, Trustee, Asset Management Company and Custodian will submit reply of the notice and authentic papers and evidences to the investigation officer within the time period mentioned in the notice given under sub-rule-(2).
4) The investigation officer will give the concerned person proper opportunity for hearing so that he can give his version in favour of his reply submitted under sub-rule (3).
5) For the purpose mentioned in sub-rule (2), the person against whom the investigation will be carried out himself or any person authorized by him may be physically present in front of the investigating officer to defend him.
6) The investigation officer, if considers it essential, may request the Commission to appoint a Reader for presenting the matters under inspection.
7) The investigation officer will submit report to the Commission considering all related papers and version of the concerned person and will mention proposed punishment in that report with argument and basis for giving punishment
Rule-87 : Show cause notice and order-1) After receipt of the report of the investigation officer, the Commission will consider that and will serve notice on the concerned person to show cause as to why the punishment suggested by the investigation officer shall not be imposed on him.
2) The concerned Mutual Fund, Entrepreneurs, Trustee, Asset Management Company and Custodian will submit reply to the Commission within twenty-one days of receipt of the show cause notice under sub-rule (2).
3) The Commission, in accordance with its consideration, will give suitable verdict within thirty days of receipt of the reply of the show cause notice and give its copy to the concerned Mutual Fund, Entrepreneurs, Trustee, Asset Management Company or Custodian.
4) The verdict given under sub-rule (3) will be self –sufficient and the arguments and reasons of giving such verdict will be mentioned in that.
Rule-88 : Results of suspension and cancellation of registration of Mutual Fund-1) If the registration of any Mutual Fund is suspended, then the Mutual Fund will abstain from doing all related activities during the period of suspension.
2) If the registration of any Mutual Fund is cancelled, then that Mutual Fund will abstain from doing all related activities and transactions from the date of cancellation.
Rule-89 : Publishing of suspension and cancellation orders in News Paper -Any suspension or cancellation order given under rule (83) and (84 shall have to published by the Commission in at least two national Daily News Papers.
Rule-90 : Appeal- If any person is aggrieved by any order of the Commission, he can submit appeal to the Commission as per Securities and Exchange Commission (appeal) regulations, 1995.
Rule-91 : Postponement and preservation-1) Securities and Exchange Commission (Mutual Fund) regulations,1997, is hereby postponed.
1 [(2) In spite of such postponement, any Mutual Fund issued, any activities done in this connection, any action taken, any registration granted or any approval given under the postponed regulations, or before that, shall be considered as issued, done, taken, granted or given under this rules.]
1 Has been substituted by the circular published in Bangladesh Gazette dated 26 June 2003 .
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