BSEC passes five years to finalise rules on MF

The long-waited amendment to the rules of mutual funds (MFs) gathers dust for more than five years since the securities regulator approved the draft rules to bring disciplines in the MF industry.
Asked, an official of the BSEC could not confirm whether the amendment to the rules of MFS will be finalised before departure of the majority number of policy makers of the securities regulator.
The tenures of majority number of policy makers of the Bangladesh Securities and Exchange Commission (BSEC) will end by May 14.
A BSEC statement on December 7, 2015 had said the draft provisions will be published in newspapers soon, seeking public opinion.
But the comprehensive amendment, except the introduction of a provision of issuing only cash dividend by closed-end MFs, is yet to be finalised by the securities regulator.
As per the proposed provisions, the fees of the asset management companies (AMCs) and trustees will be restructured.
Another provision said the MFs will hold general meeting after every two years to discuss the performance of concerned parties.
"There will be a scope of changing parties having involvement with fund management based on the decision of unit holders."
The condition for cutting the management fees would be included if the AMCs fail to issue dividends, another provision said.
At the same time, the AMCs will be eligible to get performance bonus if they could give cash dividends above stipulated rates, according to the draft amendment.
"Stock exchanges will have to introduce trading platform for non-listed MFs."
Another provision said the tenure of all closed-end MFs will be ten years and extension of tenure or conversion of the funds will be executed based on the votes cast by unit holders.
The chief executive officer (CEO) of an AMC was also supposed to be appointed with prior consent by the BSEC, said another provision included in the draft amendment.
The regulator was also supposed to incorporate a mandatory provision of publishing complete information about the funds for the greater interest of the investors.
Before finalising the proposed amendment to the rules of MFs, majority number of top officials will leave the BSEC on completion of their tenures.
The tenure of one commissioner already ended on April 18 and he backed to his previous profession.
The tenure of another commission professor Helal Uddin Nizami will end on May 1, while the tenure of BSEC chairman professor M Khairul Hossain will end on May 14.
Market analysts opine the regulator should either finalise or withdraw its decision explaining the reason.
The BSEC officials could not be reached to make comment on the updates, if any, of the pending amendment to the rules of MFs.
Presently, there are 37 closed-end MFs listed on the country's stock exchanges.
The units of 35 closed-end MFs were traded below face value of Tk 10 each before closure of the market.

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