Open-end mutual fund (MF) is likely to get trading platform on over-the-counter (OTC) market at Dhaka Stock Exchange to make it popular as fund managers have primarily agreed on the issue.
The idea comes against the back drop of many listed closed-end MFs now being converted into open-end MFs, which are non-listed.
While a closed-end MF offers only limited number of shares and puts the brake on issuing new units after it is launched, open-end does not have any curbs on the amount of shares to be issued.
The DSE had a meeting with the fund managers of the open-end MF yesterday to discuss the issue.
“We have primarily agreed to bring units of the funds on the OTC market for sale. But it needs regulatory permission,” said Tanim Noman Sattar, chief executive officer of Alif Assets Management.
He said both physical and demate formats of fund units have been proposed to trade under the existing rules of the OTC market.
Outcomes of the meeting will be forwarded to the Bangladesh Securities and Exchange Commission (BSEC), which has already showed interest over allowing non-listed units for trading at the OTC market to popularise the open-end funds, officials said.
The regulator has actually mulled over setting trading facility for the open-end funds on OTC market to encourage liquidation of the state-run Investment Corporation of Bangladesh (ICB)-operated closed-end MFs, they said.
ICB will have to be wrapped up its eight closed-end MFs by next year as the BSEC expanded operational period several times of the funds earlier.
Currently, nine open-end funds – five operated by ICB and four by private firms – are being operated in the market sold from their respective offices or through selling agents and brokerage firms.
In the new budget, finance minister AMA Muhith has proposed 15% tax exemption on investment of those units of the open-end funds.
