Stock dealers too will enjoy relaxed provisioning against losses in mutual fund
Among 37 listed mutual funds, units of over 30 are trading at a discount compared to the net asset values per unit.
Stock dealers will also be allowed to set aside a relaxed provision against losses incurred from their investments in mutual funds, said the Bangladesh Securities and Exchange Commission (BSEC).
After the 704th commission meeting on Tuesday headed by its Chairman M Khairul Hossain, the BSEC said in a press release that DSE Brokers Association (DBA) had applied for a relaxation of the provisioning requirement.
Financial institutions, mutual funds itself and merchant banks have already been allowed to set aside less provision from their operational accounts against losses in mutual fund investments.
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Listed mutual funds in Bangladesh have been suffering a rare underpricing because of deterioration in investors' confidence and experts blame various alleged malpractices by some large industry players for that.
Among 37 listed mutual funds, units of over 30 are trading at a discount compared to the net asset values per unit.
On average, the listed mutual funds are at a price level near half of their asset value. Some funds are trading at an unprecedented 60 percent discounts.
Investors have been counting unrealised losses that has caused a serious dent to their investment portfolio.
City of London Investment Management Company, a worldwide renowned closed-end mutual fund investment firm, has recently raised an allegation that the BSEC, as the securities regulator, has failed to protect investors' interest in mutual funds.
