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The securities regulator has extended the investment limit of mutual funds (MFs) in the capital market to enhance institutional participation in the market.
The Bangladesh Securities and Exchange Commission (BSEC) on Thursday took the decision in principle at a meeting held at the BSEC office.
From now on, an Asset Management Company (AMC) will have to invest at least 80 per cent of a fund into the capital market. The remaining 20 per cent will have to be invested into the money market.
As per the existing provision, the AMCs are required to invest at least 60 per cent of a fund into the capital market.
Asked, the BSEC spokesperson Mohammad Rezaul Karim said the regulator has increased the investment limit to ensure more institutional participation in the market.
At Thursday's meeting, the securities regulator also approved draft prospectuses of two open-end MFs.
As per the regulatory approval, the initial size of the BMSL National Housing Growth Fund will be Tk 250 million.
The National Housing Finance and Investments has contributed Tk 25 million as the sponsor of the fund.
The remaining Tk 225 million will be collected from investors through sales of units.
The offer price of the units of BMSL National Housing Growth Fund will be Tk 10 per unit.
The BMSL Asset Management Company is working as AMC while the Bangladesh General Insurance Company and the BRAC Bank are working as the trustee and the custodian of the fund respectively.
As per the regulatory approval, UCB Income Plus Fund will be floated with an initial size of Tk 500 million.
As a sponsor, UCB Asset Management has contributed Tk 50 million and the remaining Tk 450 million will be collected through sales of units at Tk 10 per unit.
The UCB Asset Management is the AMC of the fund while the Sandhani Life Insurance Company and the BRAC Bank are working as the trustee and the custodian of the fund respectively.
A probe committee of the securities regulator earlier conducted an investigation on the activities of the previous board of directors of United Airways.
The probe body found unlawful activities in the case of holding a substantial amount of shares of the company by the previous board members.
At Thursday's meeting, the securities regulator took the decision of taking measures against the persons responsible for unlawful activities.
The BSEC enforcement department will take measures against them in line with recommendations earlier made by the probe committee, according to the BSEC spokesperson Mr. Karim.
United Airways earlier was transferred to the OTC (over-the-counter) market over its non-performing status.