2.2
:
An efficient, transparent and honest capital market plays an important role in improvement of a country’s industrialization as well as economic improvement. To develop such a fair and accountable capital market, Bangladesh Securities and
Exchange Commission used to be set up as the regulator of the capital market with the following missions:
 Protecting the interest of investors in securities
 Developing the capital and securities markets

Formulating rules on securities related matter or ancillary thereto
The Commission consists of the Chairman and four full time Commissioners who are appointed by using the authorities for four years and terms of their provider is decided by way of the government. The authorities may additional ly reappoint them situation to their age not exceeding 65 years. The Chairman discharges responsibi lities as the chief executive of the commission.
Principa l activities of the Securities and Exchange Commission(SEC) are listed below :
 Regulating the Stock Exchanges or any other securities market.

Registering and regulating the business such as:
 stock-brokers
 sub-brokers
 share transfer agents
 merchant bankers and managers of issues
 trustee of trust deeds
 underwriters
 portfolio managers
 investment advisers and intermediaries in the securities market .
 Regulating, monitoring and Registering of collective investment scheme including all forms of mutual funds.

Regulating and monitoring all permitted self-regulatory organizations in the securities market.

Preventing fraudulent and biased trade practices relating to securities trading in any securities market.

Enhancing investors’ education and providing training for intermediaries of the securities market.

Preventing insider trading in securities.
 Regulating the substantial acquisition of shares and take-over of companies.

 Undertaking investigation and inspection, inquiries and audit of any issuer or dealer of securities, the Stock Exchanges and intermediaries and any self regulatory organization in the securities market.
 Making of securities related Rules.
 Approval of securities issuance
 Conducting research and publishing information.
2.3.1: Bang

The primary market is the part of the capital market that deals with the issuance and sale of equity-backed securities to investors directly by the issuer. Investor buy securities that were never traded before. Primary markets create long term instruments through which corporate entities raise funds from the capital market. It is also known as the New Issue Market (NIM).
The primary market is where securities are created.
In a primary market, companies, governments or public sector institutions can raise funds through bond issues and corporations can raise capital through the sale of new stock through an initial public offering (IPO). This is often done through an investment bank or finance syndicate of securities dealers.
It's in this market that firms sell new stocks and bonds to the public for the first time.
Instead of going through underwriters, corporations can make a primary issue or right issue of its debt or stock, which involves the issue by a corporation of its own debt or new stock directly to institutional investors or the public or it can seek additional capital from existing shareholders.
Role Of Securities And exchange Commission in Primary market:
The issue price
is the price at which shares are offered for sale when they first become available to the public.
Shares in the company slipped below their issue price on their first day of trading.
Investors earn the difference between the discount issue price and the full face value paid at maturity.
It is believed that the freeing of the pricing had resulted in a situation where companies had started charging fancy premium on their issues, completely unrelated to the inherent value ofthe shares.
A merchant bank is a company that conducts underwriting , loan services, financial advising , and fundraising services for large corporations and high net worth individuals. Unlike retail or commercial banks , merchant banks do not provide services to the general public. They do not provide regular banking services like checking accounts and do not take deposits.
Merchant banks mainly work with small-scale enterprises that are unable to raise funds through an initial public offering (IPO) by providing mezzanine financing, bridge financing, equity financing, and corporate credit products. They also issue and sell securities on behalf of corporations through private placements to refined investors who require less regulatory disclosure. Large merchant banks place equity privately with other financial institutions by acquiring a considerable share of ownership from companies with a significant potential for high growth rate to seal the gap between venture capital and public stock.

Merchant Bankers List :
Under Bangladesh securities and exchange commission we find out 62 merchant bankers. Among them some well-known bankers such as,

AAA Finance & Investment Ltd.

AB Investment Ltd.

Abaci Investments Limited

AFC Capital Ltd.

Agrani Equity and Investment Ltd.

AIBL Capital Management Ltd.

Alliance Financial Services Ltd.

Alpha Capital Management Ltd.

Asian Tiger Capital Partners
Investments Limited

Banco Finance and Investment Ltd.

Bangal Investmentn Ltd.

BD Finance Capital Holdings Ltd.

BetaOne Investments Limited

BLI Capital Ltd.

BMSL Investment Ltd.

BRAC EPL Investment Ltd

CAPM Advisory Ltd.

Citizen Securities & Investment Ltd.

City Bank Capital Resources Ltd.

Cosmopolitan Finance Ltd.

EBL Investments Ltd.

EC Securities Ltd.

Exim Islami Investment Ltd.

FAS Capital Management Ltd.

First Security Islami Capital &
Investment Ltd.

Grameen Capital Management Ltd.

Green Delta Capital Ltd

GSP Investment Limited

Hal Capital Limited

ICB Capital Management Ltd

IDLC Investments Ltd.

IIDFC Capital Ltd

IL Capital Ltd.

Imperial Capital Ltd.

Islami Bank Capital Management
Limited

Jamuna Bank Capital Management Ltd

Janata Capital and Investment Ltd.

LankaBangla Investments Ltd

Meghna Capital Management Ltd.

MIDAS Investment Limited

MTB Capital Ltd

NBL Capital and Equity Management Ltd

NDB Capital Ltd

NRB Equity Management Limited

PLFS Investments Ltd

Prime Bank Investment Ltd

Prime Finance Capital Management Ltd

Race Portfolio & Issue Management Ltd

Riverstone Capital Limited

Roots Investment Limited

Rupali Investment Ltd

Sandhani Life Finance Ltd

SBL Capital Management Ltd

Shahjalal Equity Management Limited

Sonali Investment Ltd

Sonar Bangla Capital Management Ltd

Southeast Bank Capital Services Ltd.

Strategic Finance Limited

Swadesh Investment Management Ltd

Trust Bank Investment Ltd

UniCap Investments Ltd

Uttara Finance Capital Management
Limited

A prospectus is a formal document that is required by and filed with the
Securities and Exchange Commission (SEC) that provides details about an investment offering for sale to the public. Companies that wish to offer stock or bonds for sale to the public must file a prospectus as part of the registration process with the SEC. A prospectus is filed for stock, bond, and mutual fund offerings. A prospectus is used to help investors make a more informed investment decision such as,
 Capital structure
 Equity
Common Stock
Preferred Stock
Retained earning

Debt
Long term Bank loan
Bond, debenture
 Background of the Business/sponsor shareholder

Business plan
 Risk factor
 Description of management

Price
 Risk factor
 Description of the underwriting

Expected production
 Expected sales
 Expected cost

Expected profits
 Expected dividend
 Use of proceeds
 Description of the underwriting
 Legal opinion regarding the formation of the company
 SEC disclaimer
 Date
A prospectus for a mutual fund contains details on its objectives, investment strategies, risks, performance, distribution policy, fees, expenses, and fund management. Companies must file a preliminary and a final prospectus.
However, the SEC has specific guidelines as to what's listed in a prospectus

for various securities. The preliminary prospectus is the first offering document provided by a security issuer and includes most of the details of the business and transaction. However, the preliminary prospectus doesn't contain the number of shares to be issued or price information. Typically, the preliminary prospectus is used to gauge interest in the market for the security being proposed. The final prospectus contains the complete details of the investment offering to the public. The final prospectus contains any finalized background information as well as the number of shares or certificates to be issued and the offering price.
Stocks are an equity investment that represents part ownership in a corporation and entitles you to part of that corporation's earnings and assets.
Common stock gives shareholders voting rights but no guarantee of dividend payments. Owners of common stockholders have special rights among them such as,
 Election of board of directors
 Authorization of issue new shares of co0mmon stock
 Approval of amendments to the corporate charter/Memorandum of association
 Adoption of bylaws/ Article of Association
 Merge with others firms
 Acquition of others firms
Preferred stocks provides no voting rights but usually guarantees a dividend payment. Preferred stockholders may paid dividend in two ways:
Cumulative and Non cumulative dividend differences:
Dividend is fixed
If net income dividend payment mandatory
If net loss dividend may be omitted in that years
Dividend is fixed
If net income dividend payment mandatory
If net loss dividend may be omitted in that years but outstanding dividend will be paid near future when the company earn sufficient profit.
In the past, shareholders received a paper stock certificate -- called a security -- verifying the number of shares they owned. Today, share ownership is usually recorded electronically, and the shares are held in street name by your brokerage firm. Investing in stocks can be tricky business.

Underwriting
:
An underwriter is generally an intermediary who assumes the risk in a financial transaction. such as in an Initial Public Offering, the underwriters buy securities from the company about to go public at a certain price and then they subsequently sell the securities to others. They are assuming the risk that they will be able to resell the securities.
Underwriting involves conducting research and assessing the degree of risk of each applicant or entity before assuming that risk. This check helps to set fair borrowing rates for loans, establishes appropriate premiums to adequately cover the true cost of insuring policyholders, and creates a market for securities by accurately pricing investment risk. If the risk is deemed too high, an underwriter may refuse coverage.
Loan underwriting
Insurance underwriting
Securities underwriting
: https://en.m.wikipedia.org/wiki/Primary_market https://www.tib.co.tz/rasilimali/index.php/primary-markets https://shodhganga.inflibnet.ac.in/bitstream/10603/167066/9/09_chapter%204.pdf
https://www.sec.gov.bd/home/merchantbanks https://www.thestreet.com/topic/47701/how-to-invest-in-stocks.html