The paper units of open-end mutual funds (MFs) are likely to be dematerialised as part of the regulatory move to accelerate the transaction of such MFs, officials said.
"The days of paper shares and units are gone. That's why we are thinking as to how the units of open-end MFs can be converted into electronic ones, which are also called 'demat units'" said a senior official of the securities regulator.
All listed securities, including the closed-end MFs, have already completed the conversion of paper shares and units into electronic ones following a regulatory directive.
According to the officials of the Bangladesh Securities and Exchange Commission (BSEC), the regulator is also thinking as to how the units of open-end MFs can be traded through the OTC (over-the-counter) market to accelerate the transaction of such funds.
"Before taking the decision regarding dematerialisation of open-end MFs, the regulator must talk to the Central Depository Bangladesh Limited (CDBL)," the BSEC official said.
He said the regulator will also assess the capacity of the OTC markets established in both bourses to introduce the transaction of open-end MFs through those platforms (OTC markets).
"Nothing is yet to be finalised as the securities regulator is presently working to revise the conversion rules of MFs. The regulator will talk to stakeholders concerned before taking any final decision," the official said.
At the next commission meeting, the regulator is set to discuss the deadlines set for conversion or liquidation of eight closed-end MFs, managed by state-owned Investment Corporation of Bangladesh (ICB).
The ICB earlier made the plea of extending the tenure of their MFs for ten years more.
The ministry of finance (MoF) arranged a view exchange meeting on June 22 last to discuss the time extension plea made by the ICB.
At the meeting, majority participants supported the regulatory decision earlier taken in favour of liquidation or conversion of the ICB-managed MFs into open-end ones.
As per the BSEC direction, ICB was also supposed to complete the liquidation or conversion of First ICB Mutual Fund within March 31, 2015.
The ICB has to close the Second ICB Mutual Fund within June 30, 2015, Third ICB Mutual Fund within September 30, 2015, and Fourth ICB Mutual Fund by December 31, 2015.
In line with that, Fifth ICB Mutual Fund has to be closed within March 31, 2016, Sixth ICB Mutual Fund by June 30, 2016, Seventh ICB Mutual Fund by September 30, 2016, and Eighth ICB Mutual Fund by December 31, 2016.
The BSEC officials said the regulator is likely to revise the deadlines for conversion or liquidation of first two MFs managed by the ICB.
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