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Management fees of mutual funds to be fixed based on performance: BSEC
Bangladesh Securities and Exchange Commission (BSEC) is set to introduce a new provision for determining the management fees of mutual funds very soon.
According to the most recent provision, the management fees for managing mutual funds will be determined based on the efficiency and performance of the fund managers or asset management companies.
The process for the introduction of the new provision has almost been completed and it will be published through a gazette notification soon, BSEC Chairman Prof. Shibli Rubayat Ul Islam said while speaking at a roundtable on the capital market on Saturday.
An MF is a financial vehicle that pools assets from shareholders to invest in securities like stocks, bonds, money market instruments, and other assets. It is managed by professional fund managers and its portfolio is structured and maintained to match the investment objectives stated in its prospectus.
The regulatory move to fix management fees based on the performance of the fund managers came in the backdrop of a long-standing demand for the introduction of time-befitting regulations for the MFs.
The poor performance of the fund managers has been blamed for the lack of investor confidence in the mutual funds.
The size of assets under management (AUM) in Bangladesh is very insignificant, compared to India and Pakistan, although the number of asset management companies (AMCs) in Bangladesh is higher than in those two countries.
There are 43 AMCs in India and the size of its AUM is $472 billion while Pakistan has 21 AMCs and the size of its AUM is $6.36 billion as of July 2022.
On the other hand, there are 54 AMCs in Bangladesh and the size of its AUM is $1.60 billion only.
In his speech, BSEC chairman Prof. Shibli Rubayat said the recent growth trend of the MFs is well and they have started disbursing dividends.
“We call the fund managers when they fail to distribute dividends. We ask them for the reasons behind distributing fewer dividends. We also want to know whether the management is weak or not,” he told the roundtable held in a city hotel.
He also said investors having no investment literacy should not invest in mutual funds.
BSEC commissioner said an amendment to the regulations for the mutual funds will bring about a massive change.
“Apart from the management fees, many other changes will be included in the new provision,” said Mr. Rahman, also the chief of the BSEC MF department.
Asked about the insignificant amount of AUM in Bangladesh, he said the situation will improve gradually.
Managing Director of IDLC Investments Md Moniruzzaman said the mutual fund is one of the most popular investment vehicles in developed countries due to investor confidence in such funds and fund managers.
“But Bangladesh is lagging way behind even its neighbor, India, in terms of the size of the mutual fund industry relative to the economy,” he said.
In the USA, the size of the industry is bigger than the economy itself, Moniruzzman said.
Prior, the experts were critical of the regulatory decisions with regard to the extension of the tenures of the closed-end mutual funds and issuance of re-investment units (RIU).
They said the AMCs are benefitted only through RIU as their management fees are increased through the RIU.
The previous commission allowed the AMCs to extend the tenures of the closed-end mutual funds.
The then commission, however, said it took the decision in step with the suggestion of the government.
Currently, there are 36 closed-end mutual funds listed on the stock exchanges.
On the other hand, the number of open-end mutual funds is 84, according to the BSEC data.
Major General Mohammad Quamruzzaman (retd) has stepped down from his role as an independent director of the board of the Dhaka Stock Exchange, citing personal reasons.
He also served as a member of the DSE’s Nomination and Remuneration Committee (NRC).
Quamruzzaman was appointed to the DSE board on 1 September 2024, following the fall of the Awami League-led government. After serving for nearly one year and nine months, he submitted his resignation on Saturday (24 May).
Speaking to Quamruzzaman confirmed his resignation, saying, “Yes, I have resigned as an independent director for personal reasons.”
Md Shafiqur Rahman, Deputy General Manager of Public Relations and Publications at the DSE, said Quamruzzaman submitted a resignation letter mentioning personal reasons behind his decision.
“The DSE board will now take a decision regarding the resignation,” Shafiqur Rahman said.
He also indicated that Quamruzzaman may be planning to join another company, which could have influenced his decision to resign.
Earlier, another independent director of the DSE board, Shahnaz Sultana, also resigned from her position. She was likewise a member of the NRC.
According to the DSE annual report, Shahnaz Sultana is the CEO and Chief Consultant of FINS Alliance Risk Advisory and Consultancy and has served as the Founder and Chairperson of the WE Global Women Foundation since 2020.
The Bangladesh Securities and Exchange Commission (BSEC) has today approved appointment of Ms. Nuzhat Anwar as the new Managing Director of Dhaka Stock Exchange PLC. (DSE).
Ms. Nuzhat Anwar brings over two decades of experience in financial markets, banking, and development finance. Prior to her appointment, she worked at the International Finance Corporation (IFC), the private sector arm of the World Bank Group, where she held multiple senior leadership roles across Africa and South Asia. Her positions included Resident Representative for Liberia and Sierra Leone, Senior Country Officer for Bangladesh covering Bangladesh, Bhutan, and Nepal, and acting Cluster Manager during the COVID-19 pandemic and the subsequent transition period.
Ms. Anwar also served as an IFC Country Officer in Botswana and Namibia, where she played a key role in establishing IFC’s presence in Gaborone and advancing a sustainable investment program, including IFC’s first investment in Botswana. She offers deep expertise in capital management, treasury and liquidity, transaction services, portfolio optimization, and market advocacy. Earlier in her career, she spent 16 years with Citibank Bangladesh and Standard Chartered Bank Bangladesh in various senior management roles.
Ms. Anwar holds a Master’s degree in Commerce (Finance) from the University of Dhaka.
On her appointment as the Managing Director of DSE, the Chairman of the Board of DSE Mr. Mominul Islam said, “We are pleased to receive the approval of BSEC for appointment of Ms. Anwar as the new Managing Director. Over the last one year the NRC and Board of have worked hard to recruit a competent leader as the MD of DSE. We are confident that Ms. Anwar, with her excellent leadership trait, vast experience in the financial sector in home and abroad and deep passion for transformation in the Capital Market of the Country, is the right candidate to lead DSE in the days ahead. Now, we will complete the internal processes to onboard Ms. Anwar at soonest.”
Dhaka Stock Market DSE, Bourse on the second working day of the week, 30th September, ended with a negative performance in Indices and a hike in Turnover from the previous working session. This information is known from DSE sources.
503 crore 90 lakh taka shares were traded on this day. 22 crore 58 lakh more tradings were done in DSE today compared to the previous workday, 29th September, Shares worth Tk 481 crores 31 lakh shares were traded last time, Sunday.
The benchmark DSEX lost 33.61 points or 5,624 The Shariah-based index DSES dropped 7.36 point or 1,263 and the blue-chip index DS30 decreased by 9.57 points or 2,053.
Of the issues traded, 72 advanced, 299 declined and 25 remained unchanged.
Shahjibazar Power Company Limited ranked top gainer on DSE, the share price increased by Tk 4.00 paisa or 9.76 percent. On this day, the share was last traded at Tk 45.00 paisa.
Dhaka Electric Supply Company Limited ranked top loser on the DSE, the share price dropped by Tk 1.80 paisa or 7.56 percent. On this day, the share was last traded at Tk 22.00 paisa.
DSE topped on trade is Pragati Life Insurance Limited 25 crore 35 lakh takas of company shares have been traded.
A total of 27 companies’ shares were traded in the Block on Dhaka Stock Exchange. A total of 1 crore 50 lakh 42 thousand 956 shares of the companies were traded. The financial value of which is 65 crore 60 lakh taka
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