Extension of ICB-managed MFs’ tenure opposed
FE Report | Wednesday, 24 June 2015
A view exchange meeting on Tuesday gave its opinion against further extending the tenure of eight closed-end mutual funds (MFs), managed by the Investment Corporation of Bangladesh (ICB).
Convened by the Ministry of Finance (MoF), the meeting also opined for either abolishing the MFs or converting them into open-ended ones, meeting sources said.
Presided over by Dr. M Aslam Alam, secretary of the bank and financial institutions division at the MoF, the meeting was attended, among others by commissioner of the securities regulator Prof Md. Helal Uddin Nizami, managing director of Dhaka Stock Exchange (DSE) Dr Swapan Kumar Bala, managing director of Chittagong Stock Exchnage (CSE) Wali-ul-Maroof Matin, chairman of ICB Dr. Mojib Uddin Ahamed, its managing director Md. Fayekuzzaman, and a representative of Bangladesh Bank.
At the meeting, majority of the participants gave their opinion not to extend further the MF's tenures, a meeting source told the FE
Following opinions at the meeting, now the Bangladesh Securities and Exchange Commission (BSEC) is responsible to take necessary steps on the way and timeframe of conversion or abolishment of the MFs.
"Some fresh decisions will be taken following the discussions of Tuesday's meeting," said a meeting participant, adding that majority participants were in favor of coming out previous systems.
"We want to make the capital market vibrant utilizing the prospects of the MFs. We are in favour of offloading new MFs in the capital market," the participant added.
The ICB officials could not be reached for the immediate reaction regarding the Tuesday's meeting.
The securities regulator earlier asked the ICB to close all its eight MFs, which are aged around 18-34 years, one by one in three-month interval starting with the first one within March 31, 2015.
In 2009, the BSEC asked the MFs which passed 10 years to pull them out from the market by December 2011.
Since issuance of the directive, the regulator extended tenure of the ICB-run close-ended MFs for three years following the plea made by the Corporation.
In 2013, the BSEC asked the ICB to complete all the relevant procedures for conversion or abolition of the mutual funds within December 31, 2014.
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