Dhaka, Bangladesh (BBN) – The Dhaka Stock Exchange (DSE) is scheduled to sit with the securities regulator on Sunday to fix their work plan on introducing Exchange Traded Fund (ETF) in the premier bourse, officials said.
The DSE officials said their discussion with the securities regulator mainly will include the formulation or amendment to the existing regulation required to introduce new products such as ETF.
ETF is similar to an open-end mutual fund (MF). The move of the premier bourse comes as part of its initiatives to introduce new products in the country’s capital market to increase its diversifications.
DSE managing director Dr. Swapan Kumar Bala said Sunday’s meeting will be first one as part of their preparation in introducing the ETF.
He also said the proposed ETF will be introduced as an open-end Collective Investment Scheme (CIS) that continuously issues and redeems its shares of stock in creation of unit in exchange for basket and representing an index.
Existing regulation of the CIS covers only the property related investments.
In case of offloading the MF, a portion of the fund is raised through the public offering. But, in case of the ETF no fund is raised through public offering as the authorised participants (APs) such as banks, broker dealers, professional trading houses and institutional firms contribute to create the ETF units and sell those in the secondary market.
BBN/SSR/AD-19Oct14-8:41 am (BST)
