Amendment to the Securities and Exchange Commission (Mutual Fund) Rules-2001

October 13, 2011

No. SECI/SAMR/ASD/2006-157/116/PKAS/31- In exercise of the powers conferred under Section 24(1) of the Securities and Exchange Commission Act, 1993 (Act No. 15 of 1993), the Securities and Exchange Commission hereby makes the following amendments to the Securities and Exchange Commission (Mutual Fund) Rules, 2001, namely:

In the said Rules,

1. Clauses (c) and (d) of sub-rule (1) of Rule 2 shall be deleted and a new clause (f) shall be inserted after clause (b), namely:

"(c) 'Investor' means any individual or body, or any commission-approved mutual fund, insurance company, or registered institution, which individually or jointly with any individual, body, insurance company, registered institution, registered register of funds, pension fund, provident fund, or other pension fund (hereinafter referred to as 'Pension Fund') forms a mutual fund;

(d) 'Custodian' means any mutual fund or other mutual fund management and its supervision is not allowed, and the management and supervision of the investment fund is not allowed under this rule, approved by the Commission from time to time, or any body or other body, insurance company, registered institution, or any company formed under the Companies Act, 1994 (Act No. 18 of 1994)."

2. After the end of clauses (n) and (o) of sub-rule (1) of Rule 2, the word 'or' shall be inserted, and a new clause (f) shall be inserted after clause (o), namely:

"(f) 'Qualified Investor' means any corporate body, trust, cooperative society, pension fund, provident fund, endowment fund, and other investment."

3. Sub-rule (1) of Rule 15 shall be amended as follows:

"(1) The bank account of the mutual fund shall be jointly operated with the custodian. The name of the fund may be added to the name of the investors."

4. Clause (x) of Rule 32 shall be deleted and replaced as follows:

"(x) The scope and responsibilities of the custodian mentioned in Rule 33, along with the size, nature, type, and duration of the agreement with the investor and trustee, the approval of the Commission, the issuance of unit certificates, the implementation and formation of the scheme and its supervision, the definition of Net Asset Value (NAV), the preparation, supply, and deposit of the investment report, and the appointment of investment advisors and custodians through the scheme management and advisory committee, shall not include any other work of the trustee and the Commission's approval for the appointment of investment advisors and custodians through the scheme management and advisory committee."

5. After serial number (9) of Rule 33, the following new serial number (10) shall be inserted, namely:

"(10) Any report of the custodian shall be considered as a compliance and audit report under clause (c) of Rule 2 of the Securities and Exchange Commission (Custodian and Compliance and Audit) Rules, 1996. In this regard, the custodian shall not be liable for the duties and code of conduct prescribed in the Securities and Exchange Commission (Custodian and Compliance and Audit) Rules, 1996."

6. Sub-rule (1) of Rule 46 shall be deleted and replaced as follows:

"(1) The minimum amount to be collected for a new scheme shall be 50 (fifty) Lakh Taka and for a new non-scheme fund shall be 10 (ten) Lakh Taka. At least 25% (twenty-five percent) of the mutual fund's (scheme's) assets shall be invested through public offers."

7. Clauses (a) of sub-rules (1) and (2) of Rule 50 shall be deleted and replaced as follows:

"(1) Subscription Fee (Subscription Fee).- The subscription fee for the formation of a mutual fund (scheme) through private placement shall be: (a) for non-scheme fund units, from the date of listing on the stock exchange, and (b) for non-scheme funds, from the date of fund formation, both of which shall be valid for 6 (six) months."

(2) (a) For a single individual, a maximum of 01 (one) Lakh Taka;"

By Order of the Securities and Exchange Commission,

Additional Director Dr. M. Kamrul Hassan
Chairman.