SEC turns down AIMS plea on stock dividend
Saturday, 13 March 2010
Mohammad Mufazzal
The Securities and Exchange Commission (SEC) on Thursday turned down an appeal from AIMS First Mutual Fund for approval of its stock dividends and rights share considering the interest of the market, officials said.
The SEC rejection came at a meeting between the trustees of AIMS and SEC Chairman Zia-ul Haq Khandaker.
Recently, AIMS declared 70 per cent stock and 130 per cent rights for its unit holders for two years combined and sought SEC approval.
"There is no way we can reconsider the AIMS proposal. An approval to it will create volatility in the market," one SEC official told the FE.
An official of the AIMS said the AIMS trustees went to the SEC to know whether they have made any mistake in the declaration of dividends.
The SEC rejected the AIMS declaration saying that it could not approve it because 15 other mutual funds that launched their operation before the amendment to Mutual Fund Act 2000 made on 23 June 2008 can claim similar approval.
The amendment has barred the close-end mutual funds from declaring stock dividend and right shares.
On November 4, the High Court allowed mutual funds to raise their size by issuing bonus and rights subject to the approval of the SEC.
"Trustees will decide their next work plan on the basis of further discussion. They have several options to get out of the glitch," the AIMS official said.
The Securities and Exchange Commission (SEC) on Thursday turned down an appeal from AIMS First Mutual Fund for approval of its stock dividends and rights share considering the interest of the market, officials said.
The SEC rejection came at a meeting between the trustees of AIMS and SEC Chairman Zia-ul Haq Khandaker.
Recently, AIMS declared 70 per cent stock and 130 per cent rights for its unit holders for two years combined and sought SEC approval.
"There is no way we can reconsider the AIMS proposal. An approval to it will create volatility in the market," one SEC official told the FE.
An official of the AIMS said the AIMS trustees went to the SEC to know whether they have made any mistake in the declaration of dividends.
The SEC rejected the AIMS declaration saying that it could not approve it because 15 other mutual funds that launched their operation before the amendment to Mutual Fund Act 2000 made on 23 June 2008 can claim similar approval.
The amendment has barred the close-end mutual funds from declaring stock dividend and right shares.
On November 4, the High Court allowed mutual funds to raise their size by issuing bonus and rights subject to the approval of the SEC.
"Trustees will decide their next work plan on the basis of further discussion. They have several options to get out of the glitch," the AIMS official said.