The total size of the Capital Market Stabilization Fund (CMSF) stands at Tk1,270 crore, consisting of undistributed bonus dividends amounting to Tk710 crore and undistributed cash dividends worth Tk560 crore.
The CMSF added Tk9 crore to the fund as interest income after meeting operational expenses, said Md Nojibur Rahman, chairman of the fund, and also a former principal secretary to the Prime Minister.
While addressing a "CMJF Talk", organized by the Capital Market Journalists Forum (CMJF) at the CMJF Auditorium on Sunday, Rahman said companies failing to transfer undistributed dividends to the CMSF by June 30 this year will be subject to a 2% monthly surcharge.
CMJF President Ziaur Rahman presided over the program.
During the discussion, Rahman said around 1,170 investors had their claims settled through the distribution of undistributed dividends.
Out of them, 800 investors received cash dividends, while 370 received stock dividends.
To revitalize the capital market, the securities regulator formed the CMSF by issuing rules through a gazette notification published on June 27, 2021.
The objective of the CMSF is to support the country's stock market alongside settling investors' claims on undistributed or unsettled dividends.
Terming the formation of CMSF as very important and innovative for the stock market, Rahman said earlier many investors were deprived of getting dividends due to various reasons.
Moreover, the securities regulator is also planning to transfer dividend disbursement responsibility to the CMSF which will also increase the income of this fund in the future.
According to the CMSF rules, 40% of the CMSF fund can be invested in the share market, 50% can be provided as loans to market intermediaries and the remaining 10% is kept in cash format in its own accounts.
From this fund, Tk225 crore has been invested in the stock market through the Investment Corporation of Bangladesh (ICB) to stabilize the market.
"We gave this money to the ICB in a fixed deposit receipts format," said Md Nojibur Rahman.
He said CMSF is developing modern software to provide better services to investors.
In response to a query about the struggling mutual fund sector, he said they are actively working on launching Exchange Traded Funds (ETFs) to boost the mutual funds industry.
Last year, CMSF introduced a closed-end mutual fund called ICB AMCL CMSF Golden Jubilee Fund worth Tk100 crore, with CMSF contributing Tk50 crore to the fund.
Regarding Bangladesh Bank's objection to the disbursement of undistributed dividends of listed banks and financial institutions, Rahman clarified that they are operating in accordance with the legal framework of CMSF.
The Financial Institutions Division has already directed Rupali Bank and ICB to deposit undistributed dividends to the CMSF following the rules and regulations, he added.
