Small investors observe hunger strike, withdraw on SEC assurance
Friday, 11 December 2009
FE Report
A group of small investors Thursday observed hunger strike in front of the Securities and Exchange Commission (SEC) demanding restoring credit facilities and making the High Court verdict on mutual funds effective.
The two-hour long hunger strike was broken after the SEC assured the investors that the commission would take their demands into account.
The investors started their hunger strike at 12:30 pm with placards reading their demands. They said the commission should withdraw loan margin suspension order on mutual funds considering their net asset value (NAV).
They withdrew the strike after receiving assurance from SEC Chairman Zia-ul Haque Khondker.
The SEC chairman said, "We'll consider their demand. However, it is yet to be clarified about the verdict of the High Court on writ petition of mutual funds as we have not had a certified copy."
On November 8 last, the High Court allowed mutual funds to raise their size by issuing bonus and rights, without curbing the securities regulator's absolute power to determine which funds would be eligible to expand capital base.
Investors filed a writ petition to the High Court in July last year (2008) challenging the SEC's amendment to mutual fund rules that barred fund managers from issuing rights or bonus shares.
On October 26 last, the SEC ordered the merchant banks, portfolio managers, brokers and dealers not to provide margin loans against mutual funds until further notice.
It also said that Z category companies would no longer be considered marginable securities.
The commission also put restrictions on margin loans against paper shares and newly listed companies and newly shifted category for one month.
A group of small investors Thursday observed hunger strike in front of the Securities and Exchange Commission (SEC) demanding restoring credit facilities and making the High Court verdict on mutual funds effective.
The two-hour long hunger strike was broken after the SEC assured the investors that the commission would take their demands into account.
The investors started their hunger strike at 12:30 pm with placards reading their demands. They said the commission should withdraw loan margin suspension order on mutual funds considering their net asset value (NAV).
They withdrew the strike after receiving assurance from SEC Chairman Zia-ul Haque Khondker.
The SEC chairman said, "We'll consider their demand. However, it is yet to be clarified about the verdict of the High Court on writ petition of mutual funds as we have not had a certified copy."
On November 8 last, the High Court allowed mutual funds to raise their size by issuing bonus and rights, without curbing the securities regulator's absolute power to determine which funds would be eligible to expand capital base.
Investors filed a writ petition to the High Court in July last year (2008) challenging the SEC's amendment to mutual fund rules that barred fund managers from issuing rights or bonus shares.
On October 26 last, the SEC ordered the merchant banks, portfolio managers, brokers and dealers not to provide margin loans against mutual funds until further notice.
It also said that Z category companies would no longer be considered marginable securities.
The commission also put restrictions on margin loans against paper shares and newly listed companies and newly shifted category for one month.