Asset Management Companies (AMCs), which have passed three years after registration not floating a single mutual fund, will face regulatory actions, including exclusion from the quota facility in IPOs, for failing to open such a pooled fund within a year from now.
The Bangladesh Securities and Exchange Commission (BSEC) issued a directive on Sunday, giving a warning to the asset managers that are yet to create such a fund.
It said companies, registered either as asset manager or fund manager, would have to launch at least one mutual fund or any type of collective investment scheme within three years after registration, or within a year from the issuance of the directive, whichever came later.
Among other institutional investors, asset management companies avail of quota facility in the initial public offering (IPO) but they will stop enjoying the facility for non-compliance with the directive.
"Necessary legal steps may be taken to revoke the registration of the asset manager or fund manager," reads the order.
Mohammad Rezaul Karim, a BSEC executive director, said asset management companies had a vital role in both the primary and secondary markets.
"The regulator issued licences to the companies so that they play the role for both the capital market and investors, who prefer risk-free investments," Mr. Karim said.
He added that the order would drive a growth of the mutual fund industry as it made operating mutual funds mandatory for asset managers.
According to the BSEC information, as many as 64 licences have so far been issued to asset management companies.
Only 39 companies have been managing mutual funds, while the remaining 15 have not yet floated any fund.
The largest asset management companies include ICB Asset Management Company, RACE Management, LR Global Bangladesh Asset Management, and AIMS of Bangladesh.
The number of the existing close-ended mutual funds is 37, whereas there are 87 open-ended mutual funds. Total assets under management stood at Tk 163.3 billion.
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