Regulatory Alerts2015-11-24
Added · Updated
DOS Circular No. 02: Investment in Special Purpose Vehicle, Alternative Investment Fund or Similar fund/funds by the scheduled bank
Scheduled banks in Bangladesh are permitted to invest in non-listed special purpose funds registered with the Bangladesh Securities and Exchange Commission, subject to a maximum aggregate investment limit of Tk. 2 billion per bank. Prior to making any firm commitment, banks must obtain permission from the Department of Off-site Supervision by submitting a board resolution and prescribed financial information. Banks must also execute an agreement with the fund's trustee to prohibit investments in related parties, the bank's own securities, or other financial institutions, and submit this agreement with the permission application. These investments are excluded from the capital market investment category under section 26Ka of the Bank-Company Act, 1991, and the policy takes immediate effect.
Bangladesh Bank (Central Bank of Bangladesh) Website:www.bb.org.bd Head Office P.O Box-325 Dhaka Department of Off-site Supervision DOS Circular No.-02 Date: ---------------------------- Chief Executives All Scheduled Banks in Bangladesh Dear Sir, Investment in Special Purpose Vehicle, Alternative Investment Fund or similar fund/funds by the scheduled banks. Your attention is drawn on the captioned subject. It has been decided that from now on scheduled banks willing to invest in non-listed special purpose fund/funds (Special Purpose Vehicle, Alternative Investment Fund or similar, stated as such fund(s) henceforth) which are registered with Bangladesh Securities and Exchange Commission (BSEC) shall generally follow the guidelines stated below:
- The aggregate investment in such fund(s) made by any scheduled bank shall be limited up to Tk. 2 (Two) billion.
- Before making any firm commitment to investment in such fund(s), the investor bank company shall have to apply for permission from Department of Off-site Supervision , Bangladesh Bank (BB). Hence, a resolution duly passed in the Board describing the intention of investment in such fund(s) along with the latest information regarding position of Capital, Liquidity, Asset & Liability and other information as prescribed by BB from time to time shall have to be submitted by the bank.
- The investor bank company shall enter into an agreement with the trustee of such fund(s) so that no investment shall be made by such fund(s) with any related party of the investor bank company or no investment shall be made to purchase the share/debenture/bond or similar instruments of the investor bank or no fund shall be deployed in such investment which constitutes a financial claim over any other bank or financial institution in future certifying that no such investment has already been made. The copy of this agreement shall be submitted to BB with application as described in clause (2) above.
- Investment in such fund(s) shall not be included in the Capital market investment, under sub-section (1) of section 26Ka of the Bank-Company Act, 1991 (Amended up to 2013), of the investor bank. In the event of any conflict between the meaning of English Text and Bengali Text of this circular, the Bengali Text shall prevail. This policy shall come into force with immediate effect. Please acknowledge receipt. Yours Sincerely, Sd/-
(S. M. Rabiul Hassan) General Manager Phone: 9530093 10 Agrahan, 1422 24 November, 2015
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