BSEC gets three options to seal fate of closed-end MFs

It'll have to choose any one

FE Report | Published: September 09, 2018 09:50:22 | Updated: September 13, 2018 12:01:44

Picture used for illustrative purpose only — Collected

A high-level meeting has proposed three options for Bangladesh Securities and Exchange Commission (BSEC) to settle the fate of closed-end mutual funds (MFs) as their respective tenures will expire in the near future.

The securities regulator has been suggested to pick any one of the recommendations for settling the issue, said an official, who attended the meeting at the Ministry of Finance on Thursday last.

The options suggested at the meeting were liquidation of closed-end MFs as per rules, conversion of the funds into open-end ones and extension of tenure once for ten years.

Chaired by Finance Minister AMA Muhith, the meeting was attended by BSEC Chairman professor M. Khairul Hossain. Senior officials of the ministry, securities regulator, stock exchanges and Investment Corporation of Bangladesh (ICB) were also present the meeting.

"Nothing is final yet. One of three options discussed at the meeting will be chosen," said a meeting participant.

He said an instruction would be delivered to BSEC and the regulator would then take a decision.

Mohammad Saifur Rahman, the BSEC spokesperson, did not make comment as he was not aware of the discussion held at the meeting.

The tenure of some closed-end MFs including Grameen One: Scheme Two, will expire this year.

Presently, there are 37 closed-end mutual funds listed with the stock exchanges.

Earlier on June 29 in 2015, the securities regulator had set deadlines for conversion or liquidation of the closed-end MFs, which earlier crossed 10 years, managed by the Investment Corporation of Bangladesh (ICB) and AIMS of Bangladesh in accordance with a decision taken by three-fourths of the unit-holders.

Later, a writ partition was filed with the High Court (HC) challenging the BSEC's directive.

Finally, the BSEC directive regarding conversion or liquidation of closed-end MFs remained valid as the Appellate Division of the Supreme Court upheld the directive.



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