A person desirous to establish a securities company and carry out the securities business shall form and register the company in accord with the existing law relevant with the Myanmar companies.

In forming the securities company:

(a) It shall include the expression “Securities” in the name of the company;

(b) it shall be formed as a limited company whose liability is limited by shares;

(c) it shall have authorized capital and a minimum of paid-up capital in accord with the stipulations;

(d) it shall be in conformity with rules, regulations, by-laws, notifications, orders, directives and procedures issued under this Law.

The securities company shall:

(a) compile and maintain accounts and records relating to the securities business of the company in accord with the stipulations;

(b) obtain permission of the Commission before appointing an auditor in accord with the existing laws relevant with the Myanmar Companies;

(c) submit the audit report to the Commission in accord with the stipulations;

(d) not reduce the authorized capital without prior permission of the Commission;

(e) submit the business report in accord with the stipulations to the Commission; 

(f) send a contract note in respect of a transaction of sale or purchase of securities, in accord with the stipulations, to the person or organization for whom the securities company executed the transaction.

The securities company shall: 

(a) keep a reserve fund out of the net profit in accord with the stipulations after the end of each financial year;

(b) utilize reserve fund only for the matter to compensate any damage relating to carry out securities business. It shall obtain prior permission of the Commission if it is required to expend for other matters.

The securities company only may apply to the Commission in accord with the stipulations to obtain one or more of the following categories of license:

(a) securities dealing business license;

(b) securities brokerage business license;

(c) securities underwriting business license.

The license holder shall apply to the Commission a minimum of 30 days prior to the expiry of the term of license if he is desirous to continue to carry out the permitted securities business when the term of license is expired.

The license-holder shall:

(a) surrender the license to the Commission within 30 days from the expiry date of the license if the term of license was expired and the securities business is discontinued;

(b) if the securities business is suspended during the term of licence, inform such suspension within seven days and surrender the licence to the Commission;

(c) carry out the securities business after obtaining the prior permission of the Commission if it is desirous to merge with other business organization or to liquidate securities company voluntarily; 

(d) suspend the business during the period of attachment of warrant on the assets of the said company or sequestration by appointment of a receiver by the Court.

A public company shall:

(a) submit to the Commission the procedure of a public offering before public offering of its securities and obtain the approval of the Commission. The Commission shall decide within 60 days;

(b) when offering to the public, publish the prospectus containing the material particulars of the company together with its memorandum and articles of the association.

The public company shall, on request by the purchaser after the transaction of the securities in the securities market has been executed, change and register the ownership of its securities when it receives a contract note sent by the relevant securities company.

(a) A board of directors of the Stock Exchange, comprising not more than five persons appointed by the Commission and not more than five persons elected by member securities companies to serve as directors, shall be formed in accordance with the constitution of the Stock Exchange.

(b) The Commission, when appointing the board of directors of the Stock Exchange, shall select the persons who have an excellent knowledge of, and experience in, the operations of the Stock Exchange, securities or financial businesses.

(c) The board of directors of the Stock Exchange shall select a director to be the chairman.

(d) The Chairman may assign a director out of the board of directors as a secretary.

(e) Necessary Committee and bodies may be formed in the Stock Exchange. 

(f) The necessary staff shall be appointed for the board of directors of the Stock Exchange.

The Stock Exchange shall:

(a) carry out the securities business only at the place stipulated by the Commission;

(b) appoint the auditor with the prior permission of the Commission;

(c) submit the audit report to the Commission annually;

(d) abide by the rules, regulations, by-laws, notifications, orders, directives and procedures issued under this Law.

The securities companies not less than three companies which are desirous to establish Over-the-Counter market, by applying collectively to the Commission, may establish Over-the-Counter market after obtaining permission.

(a) At the establishment of the over-the-counter market with the permission of the Commission under section 44, a board of directors comprising not more than 5 members elected by the member securities companies shall be formed.

(b) The board of directors of the over-the-counter market shall select a chairman out of the board of directors. 

 (c) The Chairman of the over-the-counter market may appoint a director out of the board of directors as a secretary.

The prohibited acts detrimental to the interests of the general public and to the protection of investors are as follows:

(a) involving directly or indirectly in any act, such as cheating, deceiving, making false statements or concealing important information, which seriously causes deception or influence on the activities of public offering of securities, listing, selling, buying, trading, investing and services in securities and securities market;

(b) making disclosure of untruthful information in order to incite or entice other persons to buy or sell securities or making disclosure of insufficient or untimely information that seriously affects the price of the securities in the market;

(c) using internal information to buy or sell securities for its own account or for other persons or disclosing or providing internal information or giving advice to other persons to buy or sell securities based on undisclosed internal information;

(d) conspiring in buying or selling securities by creating false demand and supply, or buying or selling continuously or using trading methods by conspiring with others or by enticing others in order to manipulate the price of securities.

(a) The securities company shall, if it is desirous to carry out the depository and clearing business of the securities, apply to the Commission in accord with the stipulations in order to obtain permit;

Any person shall not:

(a) carry out any securities business without license;

(b) establish a Stock Exchange or an Over-the-Counter Market without the permit of the Commission or carry out the functions of such Stock Exchange or Over-the-Counter Market or carry out the similar functions of such Stock Exchange or Over-the-Counter Market;

(c) use the title of the authorized Stock Exchange or Over-the-Counter Market without permission of the Commission or impersonate as a member of such Stock Exchange or Over-the-Counter Market.

Any license-holder shall not sub-lease or transfer the license in any manner.

Any responsible person of the securities company shall not allow any person or organization other than its licensed representative to operate the securities business in the name of its company.

Any member or staff of the Commission shall, with the exception of revealing, displaying or declaring the information obtained in performing the functions and duties of the Commission under any existing law, not reveal, display or declare the information to the person who is not concerned.

Any responsible person or staff of the securities company shall not participate in other securities company, other company or other economic enterprise without permission of the Commission.