On Oct. 9, BNG SEC issued proposed mutual fund regulations.
BNG SEC published draft Bangladesh Securities and Exchange Commission (mutual fund) regulations, 2025, organized into 14 chapters and 8 schedules on formation, registration, operation, management, investment policies, compliance, and dissolution.
Registration and Key Parties
All mutual funds must be registered to operate; sponsors must apply using the specified form with BDT 1 lakh non-refundable application fee; BNG SEC decides within 30 days.
Registration fee of 0.2% of declared fund size required; annual fee of 0.10% of last declared fund size or BDT 1 lakh (whichever is higher) payable during the relevant period.
Mutual funds must be formed as trusts under Trust act 1882; trust deed registered under Registration act 1908 and executed by sponsor in favor of trustee.
Registered closed-end fund sponsors must permanently hold at least 10% of committed subscription after first year; no new closed-end schemes after publication.
Trustee must be statutory body or public limited company with minimum paid-up capital of BDT 10 crore; CEO must have minimum 5 years capital market experience.
Asset manager must be statutory body or public limited company with minimum paid-up capital of BDT 10 crore; CEO must have 10 years total experience, 5 years in markets.
Custodian must be bank, financial institution, statutory body, public limited company, or depository with minimum paid-up capital of BDT 200 crore; existing parties 1 year to comply.
Investment and Operational Rules
Minimum collected fund size for new open-end schemes (excluding ETFs) is BDT 50 crore with at least 25% raised through public offering (10% with foreign sponsor).
If target not met or less than 40% collected, all funds refunded without deduction within 15 days; failure incurs 18% annual interest rate payable by asset manager.
Open-end units must be transferred/traded on exchange or BNG SEC-recognized platform; private placements in closed-end schemes subject to 6-month lock-in period.
Investment generally restricted to main board listed securities, IPO/repeat public offering (RPO)/right offer subscriptions, government securities; prohibited in de-listed, OTC, alternative trading board (ATB), SME securities.
Maximum 15% of scheme's total assets in single company, 25% in single group (all schemes combined), 30% in single sector; bank deposits in single bank capped at 10%.
Fees, Compliance and Penalties
Asset manager fees capped based on fund size from 2.0% (BDT 0-5 crore) to 0.75% (above BDT 200 crore); trustee and custodian fees each capped at 0.50% of average NAV.
Total annual regular expenses excluding preliminary issue costs cannot exceed 3% of daily average fair value NAV; open-end funds must distribute minimum 30% of annual profit.
All records maintained for at least 12 years from inception or 5 years after dissolution; NAV calculated daily at cost price and fair value; sale price cannot exceed 2% above NAV.
Annual reports published within 60 days of fiscal year-end; auditor must be independent and from BNG SEC panel; closed-end schemes declare cash dividends of minimum 70% of profit.
Penalties for violations include fines, suspension (maximum 1 year), cancellation of registration, prohibition from accepting new schemes, removal of key personnel.
Effectiveness
The consultation period closes on Oct. 23, 2025.
Regulators
BNG SEC
Entity Types
Auditor; Bank; Depo; Exch; Fiduciary; IA; Inv Co
Reference
CP 10/9/2025; ESG;
Functions
Actuarial and Valuation; Compliance; C-Suite; Financial; HR; Legal; Operations; Product Design; Record Retention; Registration/Licensing; Reporting; Risk; Trading
