BSEC approves draft of private equity, venture capital financing rules

The securities regulator has approved the draft of private equity and venture capital financing rules for financing private firms having not enough fund, officials said.

The approval came at a commission meeting held at the office of the Bangladesh Securities and Exchange Commission (BSEC) Tuesday.

"The draft titled 'Bangladesh Securities and Exchange Commission (Alter­native Investment) Rules, 2015' will be published in newspapers and circulated on the website of the regulator soon to seek public opinion," the BSEC officials said.

The BSEC's concerned committee drafted 'The Bangladesh Securities and Exchange Commission (Alter­na­tive Investment) Rules, 2015,' proposing creation of an 'Alternative Investment Fund' which will be operated by a fund manager.

The fund manager and the trustee must be registered with the securities regulator.

According to the draft, the fund manager will raise capital for a fund from eligible investors who may be Bangladeshi, foreign and NRBs by issuing units of the fund.

The minimum size of the fund will be Tk 100 million and the initial subscription by the sponsors will not be less than 10 per cent of total size of the fund.

At least 75 per cent of the fund shall be invested in non-listed securities as the main objective of forming such fund to promote private firms in their early stage.

The fund manager will be allowed to invest maximum 25 per cent of the fund in listed securities and units of alternative funds managed by other fund managers.

A fund shall be formed for a specific period of five to 15 years and the tenure will be mentioned in the constitutive documents.

All investments in a fund shall be locked for a period of three years from the date of the issuance of the units.

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