No bar to changing asset manager of two MFs, says BSEC lawyer

The securities regulator now can change the asset manager of two closed-end mutual funds (MFs) as the Supreme Court (SC) has stayed the status quo which barred the regulator from doing so, a jurist said.

"The asset manager sought status quo so that the securities regulator cannot act on changing the asset manager. Now the regulator can do it as the SC stayed the status quo," Advocate Probir Niogi, a lawyer of the securities regulator, told the FE.

The Bangladesh Securities and Exchange Commission (BSEC) earlier felt the necessity of taking the opinion from their lawyer despite the SC's stay order on the status quo on changing the asset manager.

"The verdict of the SC is above all. So, the BSEC need not take any legal opinion in this regard. Nevertheless, I will say in my opinion that the BSEC has no bar to taking any action in line with the securities rules," Advocate Probir Niogi said.

An asset manager can be changed as per the Section 31 of the Securities and Exchange Commission (Mutual Fund) Rules, 2001, he added.

According to the rules, the trustee can change the appointment of an asset manager following the demand of two-third (66.67 per cent) unit holders, subject to prior approval of the commission.

Earlier on November 7, the High Court (HC) directed all parties concerned to maintain the status quo regarding the asset manager of the Green Delta Mutual Fund and the DBH 1st Mutual Fund until January 8, 2020.

LR Global Bangladesh, the asset manager of the two MFs, sought the status quo as two-thirds of unit holders appealed to the trustee of the funds, Bangladesh General Insurance Company, to change their asset manager.

On December 1, the Chamber Judge of the Appellate Division upheld the Chamber Judge's stay order on the 'status quo' regarding the asset manager of Green Delta Mutual Fund and DBH 1st Mutual Fund.

The unit holders, who appealed to change the asset manager, submitted their lawyer's certificate copy on the SC's order to the BSEC.

Then the securities regulator decided to take their lawyer's opinion in a bid to further be sure about the lawyer's certificate issued on the stay order of the SC.

In such a situation, the BSEC lawyer said the regulator has no bar to taking action as both the Chamber Judge and the SC have stayed the HC's status quo.

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