The state-run Investment Corporation of Bangladesh (ICB) will have to complete the abolition or conversion of its eight closed-end mutual funds (MFs) to open-end ones by December 31, 2016, officials said.
The Bangladesh Securities and Exchange Commission (BSEC) on Monday set the fresh deadlines for the MFs by revising the previous deadlines at a commission meeting.
The regulator also approved some changes to the existing 'conversion guideline', which will be published soon.
BSEC's decisions came following a recent view-exchange meeting, arranged by the Ministry of Finance (MoF) to discuss ICB's plea for extending the tenures of its MFs for 10 more years.
At the meeting, majority participants supported the regulatory decision of not extending the tenures.
On the other hand, ICB opined that continuation it's MFs is required for supporting the capital market.
As per Monday's revised deadlines, the abolition or conversion of 1st ICB MF will have to be completed by December 31, 2015, whereas that of 2nd ICB MF by January 31, 2016, 3rd ICB MF by February 29, 2016, 4th ICB MF by March 31, 2016, 5th ICB MF by April 30, 2016, 6th ICB MF by June 30, 2016, 7th ICB MF by September 30, 2016, and 8th ICB MF by December 31, 2016.
Besides, the conversion or abolition of two private closed-end MFs - AIMS First Guaranteed Mutual Fund One and Grameen One : First Scheme of Grameen Mutual Fund One - will have to be completed by December 31, 2015. Both the MFs are managed by the AIMS of Bangladesh.
As per the previous deadlines, ICB was supposed to complete the abolition or conversion of its first four MFs by December 31, 2015. The remaining four MFs were supposed to be redeemed or converted to open-end ones from January 1, 2016 to December 31, 2016.
Most of the ICB-managed MFs were floated during 1980s and 1990s. However, the securities regulator was established in 1993, and the rules of MFs came into effect in 2001.
On the other hand, AIMS First Guaranteed Mutual Fund was formed in 2000, and Grameen One: First Scheme of Grameen Mutual Fund One was formed in 2005.
The issue of tenure extension came into light in 2009, when the securities regulator asked the MFs, which passed 10 years after listing, was to be redeemed by December 2011.
Since the directive, the regulator extended the tenure of the ICB-run closed-end MFs for three years.
Later, in 2013, BSEC asked ICB to complete all the procedures for conversion or redemption of the MFs within December 31, 2014.
In 2014, ICB, for its eight MFs, and AIMS, for its two MFs, sought BSEC permission for tenure extension by 10 years.
At that time, AIMS formally urged the securities regulator not to create any discrimination in case of extending tenure for the MFs.
Presently, 41 closed-end MFs are listed with both the stock exchanges. As per the regulatory directive, ICB-managed eight closed-end MFs and AIMS-managed two MFs will be delisted from the bourses.
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