Exchange Traded Funds
DSE holds meeting with AMCs over rules formulation
Officials of the Dhaka Stock Exchange on Sunday held a meeting with some asset management companies to discuss the formulation of draft rules for launching index-based exchange traded funds, DSE officials said. As part of the bourse’s business plan approved by the Bangladesh Securities and Exchange Commission with its demutualisation scheme, launching of ETFs was the first priority of the bourse.
An ETF is like a mutual fund that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange, the DSE’s business plan said.
ETFs experience price changes throughout the day as they are bought and sold. When an investor is going long in an ETF, he is buying shares of a portfolio that tracks the yield and return of its native index, it said.
DSE acting managing director Shaikh Mohammadullah, DSE general manager Jiban Chandra Das and deputy general manager Nizam Uddin Ahmed attended the meeting where representative of RACE Asset Management Company and LankaBangla Asset Management Company were present, among others.
The bourse will launch two ETFs. One will be formed based on DS30, the blue-chip index of the DSE, and another based on DSES, the Shariah index of the bourse.
‘The DSE is now working with the asset management companies to discuss legal aspects as formation of ETFs will require separate rules,’ a DSE official told New Age on Sunday.
‘After holding discussions with the AMCs, we will submit draft rules in the BSEC within the next 2-3 months,’ he said.
Once the regulator approves the rules, there will be no obstacle to launching of the ETFs within the stipulated time, the DSE official said.
The representatives of the AMCs present in the meeting on the day expressed their interest to be part of the ETFs, he said.
DSE MD Swapan Kumar Bala earlier had told New Age, ‘We have already talked to a Singapore-based asset management company and some other local AMCs about launching of the ETFs.’
The DSE at present facilitates trading of equities, mutual funds, debentures and bonds.
-With New Age input
