The securities regulator has sought legal opinion with regard to extension of term of eight mutual funds (MFs) managed by the state-run Investment Corporation of Bangladesh (ICB), officials said.
The move came after a request from the ICB to extend the tenure of the closed-end MFs for another 10 years.
The Bangladesh Securities and Exchange Commission had earlier asked the state-run corporation to redeem the funds within stipulated time frame.
Among eight MFs of ICB, tenure of 1st ICB MF ended on March 31 as per regulatory directive issued on September 29, 2014.
The regulator, in a directive, said each of the remaining seven MFs such as 2nd ICB, 3rd ICB, 4th ICB, 5th ICB, 6th ICB, 7th ICB and 8th ICB should be redeemed within every three months.
It also said the closed-end MFs can be converted into open-ended ones after completion of their tenures.
But the ICB wants to continue their funds without converting into open-ended.
The regulator has also got recommendations from the ministry of finance for extension, the BSEC officials said.
"We need legal opinion and recommendations from the ministry before we consider the ICB's plea," said a senior BSEC official.
He, however, said if ICB case is considered, funds managed by private asset management firms should also be taken into consideration.
He said if the ICB's time extension plea is not accepted, then the previous schedule set for redemption of the MFs will be rescheduled.
The BSEC official said his agency is also giving scope for the unit holders willing to quit the funds as per fair valuation if the tenure of those MFs is really extended.
In 2008, the BSEC asked the Asset Management Companies (AMCs) to wind up the closed-end MFs, whose tenure then crossed ten years by December 31, 2010.
But the tenure of the closed-end MFs managed by ICB AMCL was increased by one year, considering the market situation.
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