BSEC moves to pull-back Tk225cr stabilisation fund from ICB

The Bangladesh Securities and Exchange Commission (BSEC) directed the Capital Market Stabilisation Fund (CMSF) to pull back Tk225 crore fund from the Investment Corporation of Bangladesh (ICB) that was lent for the investment in the capital market.

As part of the better management and safeguard of funds, the capital regulator asked the stabilisation fund, a custodian of funds accumulated from investors' unclaimed dividends, to return the money.

The commission also directed that the stabilisation fund will submit a fund withdrawal plan from ICB, and inform the commission and financial institutions division of the ministry of finance, according to a letter copy of which is obtained by TBS.

With the previous mandate to stabilisation fund at least 50% of cash balance of the fund shall be used for providing loan to market intermediaries for refinancing as margin loan to invest stabilising the capital market and increasing liquidity support into the market, according to sources.

In line with the mandate, the ICB had taken the money from the stabilisation fund to invest in the capital market, and the state-owned investment banker had already invested in the capital market.

The CMSF, which had been created by collecting investors' unclaimed dividends, is turning into a new funding window for the stock market.

The CMSF was established in 2021 by collecting investors' unclaimed dividends under CMSF Rule 2021 of the BSEC.

CMSF acts as a custodian of undistributed cash and stock dividends, non-refunded public subscription money, and unallotted rights shares from the issuer of listed securities.

Cash and stocks in the fund will be returned to due claimants by the shareholders or investors at any time in the indefinite future.

The fund provided the ICB with Tk225 crore in several phases for investing in the secondary market.

The commission directed us to withdraw the investment from ICB. We have been instructed to encash the funds to safeguard them so that we can repay investors upon demand.

Wasi Azam Head of operations at CMSF

Now, to safeguard the funds, the government has decided to change the prevision purposes of the stabilisation fund that no funds to be lent to the intermediaries, and funds only will be used to settle investors' claims.

As well as, the stabilisation will take various investors awareness programs for the capital market investors.

Under the proposed 2025 act, the CMSF will be recognised as a statutory fund, providing legal clarity on its structure, management, financial operations, oversight, and relationship with the BSEC.

This legal recognition is expected to strengthen investor confidence and ensure long-term market stability.

The new act for the capital market stabilisation fund is in the process as the ministry of finance and capital market regulator are working together to finalise it.

Wasi Azam, head of operations at CMSF, told The Business Standard, "The commission directed us to withdraw the investment from ICB. We have been instructed to encash the funds to safeguard them so that we can repay investors upon demand."

According to the letter, the commission also directed the stabilisation fund to transfer its main account to state-owned commercial banks, and also directed to send a letter to the central bank to recover its stuck funds at the EXIM Bank.

Wasi Azam said, "We have already sent a letter to Bangladesh Bank seeking support regarding the EXIM Bank issue. We have also met with ICB and sent letters seeking their plan. Currently, we are regularly getting interest payments from ICB."

He said, "We have opened a new account at Agrani Bank, where the encashed FDR funds from ICB will be kept. We have already transferred all funds from private banks to Sonali Bank and Agrani Bank."

"Now, according to the plan, we will encash the funds placed with ICB to ensure that all money remains secure and can be returned immediately whenever investors demand it. We have already returned Tk375 crore in shares and cash," he noted.

"Every month, CMSF pays Tk3–5 crore in dividend claims. Once the Act is enacted, our activities will expand further," he added.

According to the latest fund data, the CMSF has so far received a total of Tk727 crore in cash alongside 14.54 crore shares transferred to the fund.

The market value of those shares stood at Tk939.21 crore as of December 2025. Meanwhile, the fund has already settled Tk329.02 crore in cash and shares to eligible investors.

In addition, CMSF earned Tk131.53 crore from investments and interest income generated from bank deposits.