The Investment Corporation of Bangladesh has moved to merge ICB AMCL First Mutual Fund with Bangladesh Fund, BSEC officials said.
They said the ICB took the move after it had got approval from the Bangladesh Securities and Exchange Commission to turn ICB AMCL First Mutual Fund into an open-ended mutual fund.
As per the declaration made by ICB AMCL First Mutual Fund, a listed close-end mutual fund, on Sunday the fund will be de-listed and the trading of the units of the fund will discontinue from September 28 as the fund will complete its tenure of 10 years on the day.
Usually redemption of
units from unit holders is a must after the completion of a fund’s tenure.
When a mutual fund matures and unit holders get back investment based on the net asset value of the fund is known as redemption.
The BSEC have already approved an application of ICB Asset Management Company Limited to convert the fund into open-ended from close-ended, a BSEC official said.
‘The company has already filed another application seeking merger of the mutual fund with Bangladesh Fund, an open-ended mutual fund under ICB AMCL. The Bangladesh Fund, which was launched in 2011 with a target of collecting Tk 5000 crore, have so far managed around Tk 1,500 crore,’ he said.
‘There is no guideline on merging one open-ended or close-ended mutual fund with another,’ a DSE official said.
‘The recent amendment to the mutual fund rules has allowed a close-ended mutual fund to be turned into an open-ended mutual fund. But, there is no scope for any open-ended mutual fund to merge with another open-ended mutual fund,’ he added.
Another BSEC official said to allow ICB AMCB First Mutual Fund to merge with Bangladesh Fund, the commission will require a guideline or a directive.
‘We have planned to call an extraordinary general meeting for getting unit holders’ approval to transform the fund into open-ended,’ an ICB official said.
Eight other mutual funds will be redeemed within this year after completion of their tenure.
The BSEC in September last year extended the maturity period of the mutual funds to December 2013 following applications from the ICB to extend the tenure of the funds.
Earlier in 2009, the BSEC asked the mutual funds, which had no maturity period and passed 10 years after listing, to pull them out from the market by December 2011.
-With New Age input
