Intermediaries get another year to invest in debt securities

Stock market intermediaries – merchant banks, portfolio managers, asset managers, mutual funds, and stock dealers – have secured another year to invest the required capital in listed debt securities.

In a directive considering the market scenario and for the benefit of the market, the Bangladesh Securities and Exchange Commission (BSEC) has extended the time until June 2024 to comply.

The regulator made the decision when the stock market was in a volatile situation and institutional investors' remained side-lined amid the liquidity crunch.

In this situation, to create breathing space for the intermediaries, the regulator relaxed rules on Monday.

The directive said the market intermediaries that are required by their parent companies' charters to conduct business in accordance with Shariah regulation shall comply with the aforementioned obligations to invest in Shariah-based debt securities.

Upon request from the intermediaries, the BSEC had earlier extended the time up to June 2023.

In 2021, the commission fixed maintaining at least a 3% investment ratio in the listed debt securities of the intermediaries own portfolios.

In order to diversify portfolio risk, the BSEC directed that merchant banks, portfolio managers, asset managers, mutual funds, and stock dealers invest at least 3% of their own portfolios in the listed debt securities by June 2023.

In another directive issued in February this year, the BSEC asked the intermediaries to invest at least 1% of their own portfolios in the listed securities by June 2023.