The stock regulator has asked the Investment Corporation of Bangladesh to wrap up or convert its eight closed-end mutual funds in phases from the stock market by next year.
The regulator has so far extended liquidation deadline of the funds several times since 2009 due to finance ministry’s recommendation and the state-run ICB’s request.
“ICB will have to liquidate or convert its eight mutual funds within the setting time-frame,” said a statement issued by Bangladesh Securities and Exchange Commission yesterday.
Under the new time-frame, First ICB Mutual Fund will have to be liquidated or converted into open-end mutual fund by December 31, 2015, Second ICB Mutual Fund by January 31, 2015, Third ICB Mutual Fund by February 29, 2016, Fourth ICB Mutual Fund by March 31, 2016, Fifth ICB Mutual Fund by April 30, 2016, Sixth ICB Mutual Fund by June 30, 2016, Seventh ICB Mutual Fund by September 30, 2016, and Eighth ICB Mutual Fund by December 31, 2016.
Back in December 2009, the then Securities and Exchange Commission had set the two-year time frame for redemption of the non-tenured mutual funds that had already crossed 10 years as listed securities.
The SEC in 2007 introduced the mutual fund rules, which says the closed-end mutual funds must have a maturity date. The ICB, however, got a waiver in the interest of its investors at that time.
As per BSEC rule, fund manager AIMS of Bangladesh will also have to liquidate or convert into open-end mutual funds of its two funds—First Guaranteed Mutual Fund and Grameen One: First Scheme of Grameen Mutual Fund One by this year.
The regulator has also brought some changes in conversation rules of open-end mutual funds from closed-end mutual funds. The amended rules will be published soon.
It also set a guideline on keeping provision during investment on a mutual fund from another to protect losses.
Under the new guideline, in case of investment on closed-end mutual funds, fund manger will have to keep 85% provision of the funds’ average unit price and net asset value at current market price.
And for investment on open-end mutual fund, fund mangers will have to keep maximum 5% provision of the funds’ average unit price and net asset value at re-purchasing price.
The BSEC also approved an auditors panel to ensure qualitative financial reporting of listed companies.
The list of auditors panel to be effective from August 1, 2015 will be posted in the BSEC’s website soon.
The BSEC has selected around 35 out of 52 audit firms applied for getting into the panel.
Audit firms, not enlisted with the BSEC’s panel, would not be allowed to audit a company that has initiated to get enlisted or already enlisted with the capital market.
The BSEC has issued a note of caution against BRAC EPL Stock Brokerage, MTB Securities Limited and advisory firm Advisors Bangladesh Limited, as the advisory firm appointed the two brokerage firms for marketing and business development.
It also approved Tk500-crore second subordinated bond of United Commercial Bank.