The Bangladesh Securities and Exchange Commission (BSEC) has approved the draft prospectuses of three closed-end mutual funds, with a combined target size of Tk75 crore, marking a fresh boost for the capital market amid a slowdown in new product launches.
The approval was given at a commission meeting held at the regulator’s office yesterday, according to a press release.
The approved funds are Midland Bank Growth Fund, Midland Bank Balanced Fund, and the Shariah-based Sandhani AML SLFL Shariah Fund.
Market participants have welcomed the move, describing it as a positive signal at a time when the introduction of new investment products in the capital market has remained sluggish.
According to the press release, the initial target size of the Midland Bank Growth Fund has been set at Tk25 crore. As the sponsor, Midland Bank PLC has invested Tk2.5 crore in the fund, while the remaining Tk22.5 crore will be raised from general investors. The fund’s unit face value has been fixed at Tk10.
Midland Bank Asset Management Company Limited will act as the asset manager of the fund. Sandhani Life Insurance Company Limited will serve as the trustee, while Commercial Bank of Ceylon PLC will act as the custodian.
At the same meeting, the commission also approved the draft prospectus and abridged version of the Midland Bank Balanced Fund. The fund’s initial target size has also been set at Tk25 crore. Midland Bank PLC, as the sponsor, will contribute Tk2.5 crore, and the remaining Tk22.5 crore will be offered to general investors. The unit face value of the fund has been fixed at Tk10.
Midland Bank Asset Management Company Limited will serve as the asset manager, while Sandhani Life Insurance Company Limited and Commercial Bank of Ceylon PLC will act as the trustee and custodian, respectively.
In addition, the commission approved the draft prospectus of the Shariah-based closed-end mutual fund Sandhani AML SLFL Shariah Fund. The fund’s initial target size has been set at Tk25 crore. The sponsor, Sandhani Life Finance Limited, will invest Tk2.5 crore, while the remaining Tk22.5 crore will be raised from general investors. The unit face value of the fund has also been fixed at Tk10.
Sandhani Asset Management Limited will act as the asset manager of the fund. Bangladesh General Insurance Company PLC will serve as the trustee, and Commercial Bank of Ceylon PLC will act as the custodian.
Market insiders said the approval of three closed-end mutual funds at a single meeting could help channel fresh long-term funds into the capital market. Mutual funds are widely regarded by investors as relatively safer, professionally managed investment vehicles, particularly for long-term investment.
The approval of a Shariah-based fund is also expected to create new opportunities for investors seeking Islamic investment products.