I WILL BE AVAILABLE ON THE 20TH FROM 9:0-11:30.

IF YOU HAVE ANY QUERIES YOU CAN COME AND SEE ME DURING THIS TIME. BANGLADESHS CAPITAL MARKET: 1996 Share Market Crash still remains as a bad memory for today's capital market regulators as well as the investors of Bangladesh. Over the last 8 years, the Government of Bangladesh has taken a number of regulatory measures to boost the capital market of the country. The Government even sought assistance from various international agencies to suggest necessary capital market reforms for Bangladesh. The main international agencies that have been working in the capital market reforms projects in Bangladesh today are: A) Asian Development Bank (ADB) B) International Monetary Fund (IMF) C) The World Bank D) USAID E) United Nations Development Program (UNDP). Insurance Companies: Insurance companies in Bangladesh could invest their insurance funds only in: A) Government and Government approved securities In particular, the insurance companies used to invest their funds in:
B) National Savings Certificates (NSCs). However, since the reduction of interest rate on the

NSCs, the insurance companies have been looking for alternative channel to make profitable investment. Therefore, after the enactment of Insurance (Amendment) Act 2000, the insurance companies are permitted to invest up to 70% of their funds into any other investments, including securities market products. For example, according to a recent statutory order of the Department of Insurance, the insurance companies in Bangladesh are allowed to invest in the state-owned Investment Corporation of Bangladesh (ICB) funds and those floated by its subsidiaries. However, it is not understood why the insurance companies are still not allowed to invest in private mutual funds. Pension Funds: Private pensions and the provident funds were required to fully invest their funds into:

A) Government securities only. However, the Section 20B Trusts (Amendment) Act 2000

permits private pensions and provident funds to invest up to 25% of their total investable funds into listed securities.

Mutual Funds: Having realised that the mutual funds are one of the major sources of capital that can be invested in securities market, the Government decided to promote floating of private mutual funds in the capital market. Securities and Exchange Commission (SEC) encouraged private sector-sponsored mutual funds to operate in the securities market. As a result, the first private mutual fund (AIMS First Guaranteed Mutual Fund) was licensed in January 2000 and listed on the stock exchanges in May 2000. The second private mutual fund (Grameen Mutual Fund) was registered with SEC in August 2001. ICB had been acting as the sole asset management firm in Bangladesh. ICB was restructured to create three new subsidiaries to carry out: A) merchant banking
B) mutual fund operations

C) stock brokerage functions separately. The company is engaged in investment management; more specifically floating and managing both open-end and closed end mutual funds, provident funds etc. The company is dedicated towards development of mutual fund industry as well as the capital market of Bangladesh. The Mutual Funds are managed by ICB as fund manager for which receives commission @1% The ICB subsidiaries are :
(a) ICB Capital Management Ltd. (merchant bank); (b) ICB Asset Management Ltd. (manager of

trusts and funds, including mutual funds); and (c) ICB Securities Trading Ltd. (Stock Broker and Securities Ltd.). Besides, the parent ICB, which does not come under the regulatory framework of the SEC, continued to manage the existing mutual funds. Therefore, these funds can:
A) borrow unlimitedly without any quantitative restriction on their investments in a particular

company, group or sector like the private funds. B) Also, in violation of the mutual fund rule, the ICB or the ICB Asset Management Ltd. does not publish net asset value or submit any report or pay any fees to the SEC. This, therefore, creates an unfair competition between public sector and private sector mutual funds.

Prospective sponsors of mutual funds (MFs) are facing a serious dearth of trustees, denting the growth of MFs and making limited choice for the asset management companies (AMCs). Only three companies are currently operating as trustees when a number of financial institutions willing to float MFs, in recent times, are knocking at the door of the AMCs, industry insiders said. They suggested issuing more licences to the qualified and reputed financial institutions to increase competition to cater to better service for the MF industry as well as help create alternatives for the AMCs.. Presently, Bangladesh General Insurance Company, state-owned Investment Corporation of Bangladesh (ICB) and Grameen Fund are the three companies which have trustee licences and, ICB and Standard Chartered Bank are the custodian licencees. All mutual funds are required to be registered with the SEC before they launch any scheme. A number of financial institutions (FIs) such as Trust Bank Ltd, IFIC Bank Ltd, Prime Bank, Mutual Trust Bank, Southeast Bank, Al-Arafah Islami Bank, BRAC Bank, Standard Bank, Agrani Insurance, Green Delta Insurance and Union Capital have already decided to sponsor close-end mutual funds. Currently, a total of 17 mutual funds are listed with the bourses. Of them, ICB and its subsidiaries have managed 13 mutual funds, AIMS Bangladesh three and BSRS (Bangladesh Shilpa Rin Sangstha) Prime Finance have one each. Mutual funds in the neighbouring countries account for more than 40 per cent of their total market capitalisation of while in Bangladesh, mutual funds has a share of only 2.83 per cent in the total market capitalisation. Closed-end Mutual Funds: The closed-end mutual funds are, namely, ICB AMCL First Mutual Fund , ICB AMCL Islamic Mutual Fund, and ICB AMCL First NRB Mutual Fund, ICB AMCL Second NRB Mutual Fund, and Prime Finance First Mutual Fund Open-end Mutual Funds: The open-end mutual funds are, namely, ICB AMCL Unit Fund, ICB AMCL pension Holders' Unit Fund . Investors have shown overwhelming interest in all the mutual funds. ICB AMCL pension Holders' Unit Certificates are sold and repurchased on the counters of ICB AMCL Head Office and the branch Offices of ICB. ICB AMCL pension Holders' Unit Certificates are sold exclusively to the retired pension holders.