Mutual funds get nod for time extension

The stockmarket regulator has given a go-ahead to the extension of the tenure of closed-end mutual funds and handed over the right to the asset managers.

Bangladesh Securities and Exchange Commission (BSEC) took the decision on Sunday amid strong opposition from the stock analysts who feared the extension may deepen the confidence crisis in the capital market.

Closed-end mutual funds are investment funds that gather a fixed pool of money for 10 years from a number of investors and re-invest them into stocks, bonds and other assets.

The asset managers can now extend or go for redemption or conversion of the closed-end mutual funds to the open-ended ones, Saifur Rahman, spokesperson of BSEC, told The Daily Star.

The decision has been taken to comply with a government order, said Rahman, also executive director of BSEC.

Last week, Finance minister AMA Muhith instructed BSEC to extend the tenure of closed-end mutual funds.

The new BSEC move has started affecting the stockmarket. Of the 34 mutual funds traded yesterday, 4 rose, 24 declined and 6 remained unchanged.