Bar on mutual funds to give stock dividend
The stockmarket regulator yesterday came up with the decision of barring the open-end and closed-end mutual funds from providing any return on unit (a form of stock dividend) to the unitholders. Mutual funds are investment funds that gather a fixed pool of money from a number of investors and re-invest them into stocks, bonds and other assets.
The asset managers provide a dividend after the yearend and it could provide cash dividend or return on unit (like stock dividend) earlier. Bangladesh Securities and Exchange Commission took the decision in a meeting held in the commission building in Dhaka.
The commission has also said the sponsors of the closed end mutual funds, which shall liquidate within a certain period, will have to hold their unit for at least one year from the fund formation date.
The sponsors will have to have at least 10 percent of their primary holding until its liquidation.
