Securities and Exchange Commission (Mutual Fund) Rules, 2001 (Amendment)

Registered No. D.A-14507, 4-Tim

Bangladesh Gazette
Extraordinary Number
Published by Authority

Monday, March 4, 2013

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Bangladesh Securities and Exchange Commission
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Order

Date, January 8, 2013

No. SECMRRSC/2006-157/143/Assn/47—In exercise of the powers conferred under sub-section (1) of Section 24 of the Bangladesh Securities and Exchange Commission Act, 1993 (Act No. 15 of 1993), the Bangladesh Securities and Exchange Commission, after previous publication, hereby amends the Securities and Exchange Commission (Mutual Fund) Rules, 2001, as follows:

In the said Rules,

1. Clauses (c) and (d) of sub-rule (1) of Rule 2 shall be replaced by the following, namely:

“(c) “Promoter” means any bank, financial institution, asset management company registered with the Commission, insurance company, statutory body, public limited company, approved information registered trust fund, pension fund, provident fund, superannuation fund, foreign fund approved by the relevant regulatory authority, which forms a mutual fund individually or collectively;”

(1463)
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1464 Bangladesh Gazette, Extraordinary, March 4, 2013

(d) “Close-end scheme” means any scheme whose maturity period is fixed, and the size of its fund can be changed only through reinvestment;”

2. New clauses (tt), (tth), (cch), (dd) and (ddd) shall be added respectively after clauses (t), (th), (c) and (k) of sub-rule (1) of Rule 2, namely:

“(tt) “Reinvestment” means retention of fund profit through issuance of new units based on the latest NAV;

(tth) “Fixed Income Securities” means a type of capital market security whose maturity is more than one year, from which investors receive specific amounts of interest or profit at specified intervals, and upon maturity, investors get back the invested principal amount; in this regard, securities that provide interest or profit at intrinsic or explicit rates shall be included;

(cch) “Selling Agent” means an institution (bank, financial institution, insurance company, market banker, stock-broker) or person appointed by the relevant asset management company, subject to compliance with the Commission’s directives, who shall hold a certificate from a specific course of the Bangladesh Institute of Capital Market;

(dd) “Collective Investment Scheme” means any investment scheme arrangement formed under specific guidelines of the Commission, through which funds are collected from investors and invested in various types of assets under the supervision of the investment manager for the purpose of earning income or profit;

(dddd) “Special Purpose Fund” means any fund formed for a specific purpose, which requires prior approval of the Commission before the formation process begins;”

3. Sub-rule (1) of Rule 48 shall be replaced by the following, namely:

“(1) If the asset manager fails to collect at least the minimum amount or target percentage of funds for the close-end fund and forty percent of funds for the open-end fund, whichever is higher, it shall refund the collected advance amount to the subscribers without any deduction;

Provided that the Commission may approve the formation of a fund below the target in special cases.”

Bangladesh Gazette, Extraordinary, March 4, 2013

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4. New Rule 50G shall be added after Rule 50F, namely:

“50G. Conversion of scheme — Upon approval of the Commission, a close-end mutual fund scheme or schemes may be converted into an open-end scheme if at least three-fourths of the unit holders present at a special meeting of the close-end fund or scheme approve the proposal for conversion.”

5. Sub-rule (2) of Rule 55 shall be replaced by the following, namely:

“(2) Sixty percent (60%) of the funds mentioned in sub-rule (1) shall be invested in the capital market, of which half of the invested amount shall be in securities listed on the stock exchange;

Provided that if any funds of a mutual fund are to be invested in any scheme of that fund, the asset manager shall inform the Commission and the relevant stock exchange in writing at least seven days prior to the investment, mentioning the amount and time of investment;

Further provided that a detailed report on the composition of the portfolio resulting from investments outside the capital market shall be submitted to the Commission on a quarterly basis.”

6. At the end of clause (g) of sub-rule (2) of Rule 65, the full stop (.) shall be replaced by a semi-colon (;), and a new clause (ng) shall be added as follows, namely:

“(ng) The fees mentioned in clauses (a), (b), (c) and (g) of sub-rule (2) shall not apply to Special Purpose Funds; in this case, the fee may be charged up to one and a half percent (1.5%) of the performance of the fee policy;

Provided that the Commission may increase the rate of the said fee in special cases;

Further provided that in all mentioned cases, serial number 10 of “Restrictions on Investment” mentioned in the Fifth Schedule [see Rule 56] shall be complied with.”

7. Rule 66 shall be replaced by the following, namely:

“66. Distribution of dividend and its limit — Each mutual fund shall, after the completion of its annual accounts, declare cash dividend or re-investment or both options among the unit holders of each scheme in accordance with these Rules and subject to the opinion of the Trustee, as described in the Prospectus or Offer Document. The amount shall not be less than seventy percent (70%) of the annual profit of the said scheme;

Provided that for those annual investment schemes whose nature and prospects were fully communicated to the investors at the outset, the rate of dividend distribution shall not be less than fifty percent (50%) of the annual profit;

Further provided that the said dividend decision shall be distributed to the unit holders within forty-five days of the decision, and a report regarding the same shall be submitted to the Commission, Trustee and Custodian within the next seven days.”

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8. Paragraph number 10 of “Restrictions on Investment” mentioned in the Fifth Schedule [see Rule 56] shall be replaced by the following, namely:

“10. Without prejudice to any matter in paragraphs 1 to 9, the total expense calculated on a weekly average basis for the year, excluding the initial issue expenses of the fund, shall not be charged more than four percent (4%) of the net assets; even if the asset manager appoints a selling agent, the said maximum limit of expense shall not exceed four percent (4%).”

By Order of the Bangladesh Securities and Exchange Commission

Professor Dr. M. Khairul Hossain
Chairman.

Dr. Md. Ali Akbar (Deputy Secretary), Deputy Director, Bangladesh Government Press, Tejgaon, Dhaka, printed.
Abdur Rashid (Deputy Secretary), Deputy Director, Bangladesh Forms and Publications Office, Tejgaon, Dhaka, published. web site: www.bgpress.gov.bd