Dhaka: Stock-trade regulator Securities and Exchange Commission (SEC) is set to issue a new direction on allocation of private placement of mutual funds, putting a cap.
As per the new directive, any individual will be allowed to spend up to Tk 10 lakh to buy private placement shares.
An unregistered company on the capital, however, will have such shares in its portfolio with Tk 1 crore buy-limit. But a listed company and mutual fund can buy up to Tk 5 crore worth of private-placement shares.
Private placement (or non-public offering) is a funding round of securities, which are sold without an initial public offering (IPO), usually to a small number of chosen private investors, including banks, mutual funds and insurance companies.
The new rules for the market players will not allow the registered trust fund, pension fund and provident fund to get private placement with more than Tk 5 crore.
Besides, no one becomes an entrepreneur of mutual fund without forming mutual fund with banks, financial institutions, insurance companies, registered trust funds, pension funds and provident funds.
“Private-placement shares of entrepreneurs would be locked in for 2 years after getting the share-registration certificate,” says one provision of the edicts, according to a source in the know.
Senior member of the Mansur Alam told bnglanews24.com.bd, “We have taken the initiative to ensure more transparency in the allotment process of mutual fund placement. Implementation of the direction will help remove controversy over the allotment of mutual funds’ private placement.”
BDST: 04:40 Hrs, May 27, 2010.