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Tenure of six more MFs extended for another 10 yrs

FE Online Report | Published: August 22, 2019 12:15:40 | Updated: August 24, 2019 10:41:15


Photo collected from internet has been used for representational purpose only

The tenure of six more closed-end mutual funds, managed by LR Global Bangladesh Asset Management Company, has been extended for another 10 years each, according to an official disclosure on Thursday.

The closed-end mutual funds are investment funds that gather a fixed pool of money for 10 years from a number of investors and re-invest them into stocks, bonds and other assets.

The mutual funds whose tenure has been extended are DBH First Mutual Fund, Green Delta Mutual Fund, LR Global Bangladesh Mutual Fund One, MBL 1st Mutual Fund, AIBL 1st Mutual Fund and NCCBL Mutual Fund-1.

The LR Global Bangladesh Asset Management Company, the asset manager of these funds, has informed that by order of the government, the BSEC through the exercise of its power accorded by the Securities and Exchange Ordinance, 1969 (XVII of 1969) Section 20A has given consent to extend the tenure of these existing mutual funds for another 10 years each.

Accordingly, the tenure of DBH First Mutual Fund has been extended up to February 06, 2030, Green Delta Mutual Fund up to September 27, 2030, LR Global Bangladesh Mutual Fund One up to September 18, 2031, MBL 1st Mutual Fund up to February 07, 2031, AIBL 1st Mutual Fund up to January 09, 20131 and NCCBL Mutual Fund-1 has been extended up to May 23, 2032, according to the disclosure.

In September 2018, the stock market regulator gave a go-ahead to the extension of the tenure of closed-end mutual funds and handed over the right to the asset managers to comply with a government order.

In this regard, the Bangladesh Securities and Exchange Commission (BSEC) also issued a directive, scrapping its previous directive regarding the conversion or liquidation of closed-end MFs on completion of the tenure of ten years.

According to the BSEC directive, the total tenure, including the fresh term of ten years, of the existing closed-end mutual funds will not be more than 20 years.

Recently, the tenure of ten more mutual funds, managed by the Bangladesh RACE Management, had been extended for another 10 years.

Currently, 37 closed-end mutual funds are listed on the Dhaka Stock Exchange.

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