Dhaka, Bangladesh (BBN) – The Securities and Exchange Commission (SEC) has lifted the investment cap for mutual funds (MFs) up to December 31 this year aiming to increase the flow of funds to the cash-strapped stock market.
The decision was taken at a commission meeting on Thursday with its Chairman M Khairul Hossain in the chair.
“We’ve given the approval considering the present situation of the stock market,” SEC Executive Director Mohammad Saifur Rahman told reporters after the meeting.
He also said the fund managers on Wednesday sought postponement of Section 56 of the Mutual Fund Act 2001 for some time, so that they can freely support the market, injecting idle funds.
As per the Section 56 of the Mutual Fund Act 2001, a fund manager is permitted to invest at least 75 per cent of a scheme in the stock market.
They can invest maximum 10 percent and 25 percent of a scheme in the shares of a company and a sector respectively.
Earlier, the SEC relaxed the investment bindings for mutual funds from January to March, 2011.
Currently, a total of 39 MFs, including three unit funds, are performing their operations in the stock market.
BBN/SSR/AD-16Sept11-3:09 pm (BST)
