BSEC backtracks on its previous decision
The Bangladesh Securities and Exchange Commission backtracking on its previous decision on Tuesday extended tenure for eight mutual funds of the Investment Corporation of Bangladesh by another year to December 31, 2014. Earlier on November 4, the BSEC had allowed ICB to convert the eight mutual funds — First ICB Mutual Fund, Second ICB Mutual Fund, Third ICB Mutual Fund, Fourth ICB Mutual Fund, Fifth ICB Mutual Fund, Sixth ICB Mutual Fund, Seventh ICB Mutual Fund and Eighth ICB Mutual Fund — to convert the funds into open-ended mutual funds from close-ended ones after their tenure expire on December 31 this year.
The stock market regulator had taken the move as per the latest amendments to the mutual fund rules.
The eight mutual funds were launched in the capital market during the years 1980-1996.
The BSEC extended the time for the mutual funds on Tuesday at a regular commission meeting presided over by its chairman M Khairul Hossain, a BSEC news release said.
The regulator took the decision following an application from the ICB seeking extension of time for the mutual funds considering the present market situation, BSEC officials said.
The BSEC earlier had allowed the ICB to convert the eight mutual funds into open-ended funds following an application from the organisation.
But, the ICB later filed another application to the commission to extend the tenure of the funds, they said.
The ICB in August filed another application with the BSEC to merge the eight close-ended mutual funds with the Bangladesh Fund, but the commission rejected the plea as no rules permit such merger.
The latest amendments to the Mutual Fund Rules-2001 also allow all the mutual funds to issue stock dividend for their unit holders as re-investments.
As per the mutual fund rules, a decision of conversion will be effective after getting approval of two-third of unit holders of a fund in an extraordinary general meeting.
The ICB in August filed another application to the BSEC seeking permission from the regulator to convert ICB AMCL First Mutual Fund, a listed closed-ended mutual fund, into an open-ended fund which had already converted into open-ended after getting approval.
ICB AMCL First Mutual Fund under ICB Asset Management Company Limited finished its 10-year tenure on September 28, 2013.
Earlier in 2009, the BSEC had asked the mutual funds, without any maturity period and passed 10 years after listing, to pull them out from the market by December 2011.
Later in September last year the capital market regulator had extended the maturity period of the mutual funds to December 2013.
-With New Age input
