RACE claims 100pc of assets secure and safe

Bangladesh RACE Management in response to the recent order by the securities regulator claimed to the stakeholders that all listed and non-listed securities of mutual funds are securely held by the custodians.

RACE claimed 97 per cent of the assets under the supervision of respective custodians –Investment Corporation of Bangladesh and Brac Bank. The remaining assets are also managed under strict protocols to ensure their safety and integrity.

Various types of mutual fund accounts, including custodian DP accounts, custodian DP and brokerage trading omnibus accounts, brokerage trading (Parent) accounts, brokerage trading (Link) accounts, brokerage suspense accounts, and brokerage fractional accounts, serve distinct and valid purposes in the lawful management and settlement of mutual fund transactions.

“These accounts ensure that all mutual fund operations are conducted with utmost transparency and security,” said the RACE in a letter sent to the Bangladesh Securities and Exchange Commission (BSEC) on Tuesday.

All mutual fund assets are held in custody by custodians ICB and BRAC Bank under the direct supervision of trustees ICB and BGIC, which guarantees their security and makes misuse impossible.

Listed shares, which constitute about 80 per cent of mutual fund assets, are held in custodian DP Accounts as per Trust Deed and Custodian Agreements.

As evidence of the secure custody of these assets, DP reports for closed-end mutual funds as of May 31, this year, are being submitted to the Commission.

These reports, along with Mutual Fund reports on listed and non-listed shares, demonstrate such as ICB and BRAC Bank hold 97 per cent of mutual fund assets securely, including listed shares valued at Tk 24.96 billion (about 80 per cent of fund assets) and non-listed securities (about 17 per cent of fund assets).

A senior official of Race claimed that a certain vested quarter was using misunderstandings and information gaps to spread false and malicious rumors.

“Such targeted misinformation is hurting our reputation and also damaging confidence in the mutual fund industry”.

Supporting documents verifying the security and integrity of the managed assets have been submitted to the regulator, affirming RACE’s commitment to transparency and regulatory compliance.

During the last five years through 2023, RACE paid Tk 6.83 billion to unit holders as cash dividends for all mutual funds.

On June 24, the BSEC suspended all beneficiary owner (BO) accounts opened in the name of mutual funds managed by Bangladesh RACE Management.

This suspension follows a BSEC inquiry that revealed the fund manager’s failure to “protect unit holders” interests.

RACE manages 10 closed-end mutual funds, accounting for 48 per cent of assets under management of close-ended funds.

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