Dhaka, June 15: The Securities and Exchange Commission (SEC) has brought changes in merchant bank and portfolio manager rules 1996, barring the merchant banks from appointing or sacking their managing directors and chief executive officers without its prior permission. The rules were amended after taking opinions from people and stakeholders after advertising on the newspapers.

“This has been done for brining transparency and efficiency in the merchant banking operation,” said Saifur Rahman, SEC executive director, after the commission meeting, presided over by SEC Chairman M Khairul Hossain.   The securities regulator also gave green light to two closed-end mutual funds -- LR Global Bangladesh Mutual Fund One and AB Bank First Mutual Fund-- to hit in the market.
Size of the LR Global Bangladesh Mutual Fund One is Tk 3.0 billion, sponsored by AB Bank, City Bank, Trust Bank, IDLC Finance Limited, Green-Delta Insurance Company, Popular Insurance and International Leasing and Financial Services Ltd.

A mutual fund is a professionally managed collective investment scheme that pools money from many investors and invests in stocks, bonds and short-term money market instruments.
In the LR Global Bangladesh Mutual Fund One, sponsors will subscribe units worth Tk 500 million as sponsors, while Tk 1.0 billion will be raised through pre-IPO or private placement, and the rest Tk 1.50 billion will be kept for initial public offering (IPO).

Size of the AB Bank First Mutual Fund is Tk 1.50 billion. Earlier, the Bank has decided to reduce the fund size of AB Bank 1st Mutual Fund to Tk 1.50 billion from Tk 3.50 billion.

Of the fund, AB Bank Limited will subscribe Tk 300 million as sponsor, placement portion of the fund will be Tk 450 million and IPO portion of the fund will be Tk 750 million. Per unit price of each of the two mutual funds will be Tk 10 and both the funds are closed-end with a maturity period of 10-years. Currently, 35 closed-end mutual funds are being traded on the bourses.

Source: The Independent, Bangladesh/16th June, 2011