The total size of the Capital Market Stabilization Fund (CMSF) stands at Tk 12.70 billion, consisting of undistributed bonus dividends amounting to Tk 7.10 billion and undistributed cash dividends worth Tk 5.60 billion.
The CMSF added Tk 90 million to the fund as interest income after meeting operational expenses, said Md Nojibur Rahman, chairman of the fund, expressing optimism that more funds could be added in the current financial year.
Mr Rahman, also a former principal secretary to the Prime Minister, said they are diligently working to increase the fund's size, with the best interests of the stock market and investors in mind.
The Bangladesh Securities and Exchange Commission (BSEC) is adopting stricter measures to realise unclaimed and undisbursed dividends from companies listed on the country's stock market.
While addressing the 'CMJF Talk', organised by the Capital Market Journalists Forum (CMJF) at the CMJF Auditorium on Sunday, Mr Rahman said companies failing to transfer undistributed dividends to the CMSF by June 30 this year will be subject to a 2 per cent monthly surcharge.
CMJF President Ziaur Rahman presided over the programme, as it was conducted by the forum's General Secretary Abu Ali.
During the discussion, Mr Rahman said around 1,170 investors had their claims settled through the distribution of undistributed dividends. Out of them, 800 investors received cash dividends, while 370 received stock dividends.
To help revitalise the capital market, the securities regulator formed the CMSF by issuing rules through a gazette notification published on June 27, 2021.
The objective of the CMSF is to support the country's stock market alongside settling investors' claims on undistributed or unsettled dividends.
Terming the formation of CMSF as very important and innovative for the stock market, Mr Rahman said earlier many investors were deprived of getting dividends due to various reasons.
"With the formation of CMSF, they get an opportunity to receive this undistributed cash or stock dividends which created confidence among investors".
Moreover, the securities regulator is also planning to transfer dividend disbursement responsibility to the CMSF which will also increase the income of this fund in the future.
According to the CMSF rules, 40 per cent of the CMSF fund can be invested in the share market, 50 per cent can be provided as loans to market intermediaries and the remaining 10 per cent is kept in cash format in its own accounts.
From this fund, Tk 2.25 billion has been invested in the stock market through the Investment Corporation of Bangladesh (ICB) to stabilise the market.
"We gave this money to the ICB in a fixed deposit receipts format," said Md Nojibur Rahman.
He said CMSF is developing modern software to provide better services to investors.
In response to a query about the struggling mutual fund sector, he said they are actively working on launching Exchange Traded Funds (ETFs) to boost the mutual funds industry.
"So far, three companies have already sent proposals to us and we are negotiating with them to launch ETFs," said Mr Rahman.
Last year, CMSF introduced a closed-end mutual fund called ICB AMCL CMSF Golden Jubilee Fund worth Tk 1.0 billion, with CMSF contributing Tk 500 million to the fund.
Regarding Bangladesh Bank's objection to the disbursement of undistributed dividends of listed banks and financial institutions, Mr Rahman clarified that they are operating in accordance with the legal framework of CMSF.
The Financial Institutions Division has already directed Rupali Bank and ICB to deposit undistributed dividends to the CMSF following the rules and regulations, he said.
The Bangladesh Bank is the regulator of the money market and the BSEC is the regulator of the capital market. They are jointly working for the development of the country's stock market, he added.
Mr Rahman announced that CMSF will partner with CMJF to present the 'Best Reporting Award' to promote stock market journalism.
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