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Merchant banks allowed provisioning facility

Rules of qualified investor offer by small-cap cos approved


FE Report | Published: November 21, 2018 14:13:55 | Updated: December 03, 2018 12:16:38


The securities regulator has allowed the merchant banks to avail provisioning facility like financial institutions (FIs) and mutual funds (MFs).

The facility has been offered in case of provisioning against the losses incurred from the investments made in MFs.

The decision was taken on Tuesday at a meeting held at the office of the Bangladesh Securities and Exchange Commission (BSEC).

The FIs and MFs had earlier been allowed to avail provisioning facility against the losses incurred through investments made in MFs.

Following the plea made by merchant banks, the securities regulator has also allowed them to avail same facility.

According to BSEC decision, the amount of a merchant bank's provisioning will be equivalent to the amount derived by subtracting 85 per cent of the net asset value (NAV) of the units of closed-end MFs at current market price from the purchase price of the units.

In case of open-end MFs, the amount of the provisioning will be equivalent to the amount derived by subtracting 5.0 per cent of the repurchase price of the fund's units from the average purchase price of the units.

At Tuesday's meeting, the securities regulator has also approved the rules of qualified investor offer by small capital companies.

The BSEC said the gazette of the rules will be published soon.

The securities regulator has also warned A. M. Securities and Financial Services for not submitting its audited financial statement for the year ended on June 30, 2017.

mufazzal.fe@gmail.com

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