The securities regulator has started the job of ensuring compliance in operations of mutual funds in a bid to make such funds the alternative of FDR (fixed deposit receipts).
The chairman of the Bangladesh Securities and Exchange Commission (BSEC) Prof. Shibli Rubayat Ul Islam said this on Sunday at a webinar arranged by DSE Brokers Association of Bangladesh (DBA).
"Criticisms were galore in media and different platforms over the poor performance of mutual funds which are supposed to distribute dividend as per mandate," BSEC chairman Prof. Islam told the webinar as the chief guest.
He said the meaning of mutual funds is to collect funds from people for a certain period to disburse dividend as per expectation.
"Later, investors are no more attracted to mutual funds when the objective is deviated or something different is done to hamper the interest of unit holders," Mr. Islam said.
Subsequently, the newly-floated mutual funds are also being affected following the poor performance of old ones, the chairman said.
"That's why we are working to ensure governance in operations of mutual funds so that such investment tools can be the alternative of FDR," BSEC chairman said.
He said the incumbent commissioners will remain stick to the stance of ensuring corporate governance in the capital market as long as they are in position at the securities regulator.
"Apart from vibrancy in secondary market, there must be activities in the primary market" BSEC chairman said.
He said the securities regulator has intervened in operations 'Z' category companies to secure the interest of shareholders.
"Public will make the securities regulator responsible if they fail to trace the owners of 'Z' category companies. That's why we have conducted investigations to dig out reasons behind dire straight of 'Z' category companies," said BSEC chairman Prof. Islam.
He said many 'Z' category companies have already started performing well following the regulatory intervention.
"We have found some 'Z' category companies whose offices and owners are out of trace. We are working to secure investments of general investors," said the BSEC added.
Dr. Shaikh Shamsuddin Ahmed, a BSEC commissioner, said investors are affected following the misuses of funds kept in consolidated customer's accounts.
"Proper management of consolidated customer's account is important for the interest of investors and the capital market," said Mr. Ahmed.
The chairman of Dhaka Stock Exchange (DSE) Md. Eunusur Rahman has also laid importance on proper maintenance of consolidated customer's account.
Mohammad Saifur Rahman, a BSEC executive director, said investors should not invest based on others.
"Those who did this have become loser. Many investors have interest to transact junk shares despite those are nonperforming companies," Mr. Rahman said.
He urged investors to invest considering the fundamentals of listed companies.
DBA President Sharif Anwar Hossain presided over the webinar held to observe World Investor Week 2020.
Richard D' Rozario, senior vice president of the DBA, presented his key note speech in the webinar attended by many stakeholders of the capital market.
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