First board of Capital Market Stabilisation Fund gets regulator's nod

The securities regulator approved the first board of governors of the much-expected Capital Market Stabilisation Fund (CMSF), paving the way for hedging bourse operations against volatility.

The approval came Sunday through an order issued by the Bangladesh Securities and Exchange Commission (BSEC).

Headed by ex-principal secretary Nojibur Rahman, the board "shall be responsible and accountable for the fund as per the rules", the order says.

The members of the board are Mohammad Saifur Ramhan, a BSEC executive director, Dr Tanzila Depty, an associate professor of finance at Dhaka University, Shyamal Dutta, editor at Bhorer Kagoj, Mr Tarique Amin Bhuiyan, managing director at DSE, A. K. M. Nurul Fazal Bulbul, vice chairman at CDBL, Dr Mohammad Tareq, a professor of accounting and information systems at DU, and A. K. M. Delwar Hossain, FCMA.

The president of Bangladesh Association of Publicly Listed Companies (BAPLC) and the chairman of Chittagong Stock Exchange are also members of the board of governors of the CMSF.

Earlier, the securities regulator had issued rules for the CMSF through a gazette notification published on June 27 to help revitalise the capital market.

The objective of the CMSF is to support the country's stock market alongside settling investors' claims on undistributed or unsettled dividends.

The total fund, worth Tk 210 billion, will come from the undistributed or unsettled dividends, namely cash, stock and rights.

As per the information of the securities regulator, 335 listed companies have unclaimed cash dividends worth Tk 9.56 billion and unclaimed or unsettled stock dividends worth Tk 199.86 billion.

The securities regulator has already asked the listed companies to transfer the funds into the account of the CMSF.

Under the supervision of the board of governors approved on Sunday, direct sale and buy of listed securities will be conducted with the funds.

Besides, the market intermediaries will be able to get loans at a nominal interest rate from the fund.

According to the rules, a maximum 40 per cent of the cash balance of the funds may be used for direct buying and selling the listed securities to ensure depth to the market.

At least 50 per cent of the cash balance of the funds shall be used for providing loan to market intermediaries for refinancing as a margin loan.

The remaining 10 per cent of the cash balance may be used for investment in other securities such as fixed deposits and government securities, according to the investment ceiling as defined by the rules.

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