The securities' regulator has rejected the ICB's (Investment Corporation of Bangladesh) plea made to continue the management of ICB Unit Fund by the corporation without transferring the fund to its subsidiary company.
As per the regulator's latest decision, the ICB will have to hand over the unit fund to its subsidiary company-- ICB Asset Management Company Limited.
According to section 25 of the Securities and Exchange Commission (Mutual Fund) Rules, 2001, no company or statutory body will be appointed as fund manager unless they are registered by the commission as an Asset Management Company Limited (AMCL).
Recently, the state-run ICB requested the securities' regulator to review its order delivered in February last to hand over the management of the country's largest ever open-end mutual fund--ICB Unit Fund-- to the subsidiary company ICB Asset Management Company Limited.
Finally, the Bangladesh Securities and Exchange Commission (BSEC) has rejected the review petition of the corporation.
"The regulator has rejected the ICB's review petition and the unit fund will have to be handed over to its subsidiary having the license of the fund manger as per previous order," said a senior official of the securities regulator.
The managing director of the ICB could not be reached through cell phone to make comment on the latest decision of the securities' regulator.
In February last, the securities regulator asked the state-run corporation to hand over the management of ICB Unit Fund to its subsidiary company within six months.
The regulator also asked the ICB to submit monthly work plan set for shifting the management of unit fund to the commission.
According to BSEC officials, the regulatory order came in line with the securities rules regarding management of the mutual funds.
"The regulator took the decision to bring the ICB Unit Fund under the regulatory framework along with creating a level playing field for all fund managers," the BSEC official said.
He said after hand over of the unit fund to Asset Management Company, all functions of the fund will be conducted as per rules applicable to the operation of other open-end mutual funds.
The size of the ICB Unit Fund is around Tk 37 billion as of June 30, 2016.
The ICB itself has been managing the unit fund since 1981 when there was no rules for MFs in absence of any full-fledged regulatory body for the capital market.
After inception of the securities' regulator in 1993, Mutual Fund Regulation was formulated in 1997 setting the provision of getting registration of fund manager from the securities' regulator.
Later, the Securities and Exchange Commission (Mutual Fund) Rules came into effect in 2001.
"Any company or statutory body registered by the commission as fund manager shall have to be appointed for management and operation of every MF and its schemes." the section 16 (2) of Exchange Commission (Mutual Fund) Rules, 2001 reads.
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