SEC restricts floatation of mutual funds below Tk 50cr

The stock market regulator will not allow floatation of any mutual fund below Tk 50 crore.
Fund managers hailed the initiative to fix the minimum size of a fund in order to make it cost effective.
Issue, management and financial costs are higher for a small size mutual fund in proportion with larger ones, said the Securities and Exchange Commission, which fixed the minimum size at a meeting yesterday.
"Besides, it will ensure qualitative supply of investment securities in the market," Ziaul Haque Khondker, chairman of SEC, told The Daily Star after the meeting.
Prior to the new rules, there was no ceiling in mutual fund sizes.
"It's a welcome move. It will be cost effective for mutual fund floatation and management," said Yawer Sayeed, managing director of AIMS of Bangladesh, an asset management company.
In yesterday's meeting, the SEC decided that from now on no company can hold board meeting during the trading session if the meeting is expected to take any price sensitive decision such as dividend and financial statement.
The company can hold the meeting after trading hours or on holidays.