The Securities and Exchange Commission announced on July 10 that it will take legal action against public companies that sell shares or plan to issue shares without its prior permission. The Securities Exchange Certificate Transaction Law was passed by the Union parliament on July 31, 2013. Under this law, the Union government formed the SECM on August 19, 2014.

According to Chapter 6, Section 35, of the law, a public company must: (a) before selling to the public, submit a proposal to the commission and acquire its approval as to how the public offer shall be carried out and (b) when selling to the public, announce the prospectus consisting of the company’s memorandum of association, articles of association and salient facts.

An official from the SECM said: “Rules, regulations and procedures have been enacted in the law and bylaws. We have informed public companies of it by issuing notifications and directives. But some companies have been found failing to abide by the law. Actions will be taken against those who break the law in order to give protection to investors.”
The main purpose of the law is to protect investors. Those convicted of violating any provisions of the law can be punished with up to 10 years in prison, a fine or both.

Ref: http://www.elevenmyanmar.com/business/5396

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