Mutual funds free to fix their record dates
Wednesday, 10 February 2010
FE Report
The Securities and Exchange Commission (SEC) said fund managers will not need permission to fix the record date for offering cash dividend.
The SEC said this in reply to a letter of the Investment Corporation of Bangladesh (ICB) asking for fixation of record date for distributing cash dividends among the unit holders.
The ICB fund mangers failed to declare cash dividends for 2008 and 2009 following a writ petition on the mutual funds.
On January 31, the ICB sent a letter to the SEC seeking permission and a directive relating to declaration of record date for cash dividends.
The SEC said there is no requirement to take permission to offer cash dividends to the unit holders as it does not relate to the verdict of the High Court.
"The Mutual Funds need not to take permission from the SEC for offering cash dividends," SEC member Yasin Ali told the FE.
"We are awaiting opinion from our legal advisor for distribution of cash dividends," ICB General Manager Md. Iftikhar-Uz-Zaman told the FE.
Earlier, in a verdict the High Court allowed the close-end mutual funds to issue rights or bonus shares without curbing the absolute power of the SEC. Later, the SEC decided not to appeal against the verdict of the High Court and said in a directive that the funds, which launched their operation before the amendment to the Mutual Fund Act 2001 in June 2007, will have to apply to the SEC for the issuance of rights or bonus.
The Securities and Exchange Commission (SEC) said fund managers will not need permission to fix the record date for offering cash dividend.
The SEC said this in reply to a letter of the Investment Corporation of Bangladesh (ICB) asking for fixation of record date for distributing cash dividends among the unit holders.
The ICB fund mangers failed to declare cash dividends for 2008 and 2009 following a writ petition on the mutual funds.
On January 31, the ICB sent a letter to the SEC seeking permission and a directive relating to declaration of record date for cash dividends.
The SEC said there is no requirement to take permission to offer cash dividends to the unit holders as it does not relate to the verdict of the High Court.
"The Mutual Funds need not to take permission from the SEC for offering cash dividends," SEC member Yasin Ali told the FE.
"We are awaiting opinion from our legal advisor for distribution of cash dividends," ICB General Manager Md. Iftikhar-Uz-Zaman told the FE.
Earlier, in a verdict the High Court allowed the close-end mutual funds to issue rights or bonus shares without curbing the absolute power of the SEC. Later, the SEC decided not to appeal against the verdict of the High Court and said in a directive that the funds, which launched their operation before the amendment to the Mutual Fund Act 2001 in June 2007, will have to apply to the SEC for the issuance of rights or bonus.