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 Janata Bank First Mutual Fund Fund manager seeks easing of lock-in period

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Posts : 13
Join date : 2010-05-27

PostSubject: Janata Bank First Mutual Fund Fund manager seeks easing of lock-in period   Mon Jun 07, 2010 12:15 am

Mohammad Mufazzal

The sponsors and fund manager want to ease the lock-in period of their private placement in Janata Bank First Mutual Fund (JBFMF) for getting the trust deed's approval before the execution of the revised criteria of mutual funds, officials said.

The officials of the Securities and Exchange Commission (SEC) said, in an effort to ease the lock-in period for private placement, the RACE Management PCL, asset manager of the JBFMF, has not mentioned the lock-in period in their prospectus, which has been submitted to the SEC.

Earlier, the board of directors of Janata Bank Ltd approved a proposal to float the said closed-end mutual fund worth Tk 2.0 billion (Tk 200.00 crore).

The fund will offload the units worth Tk.1.0 billion in the Initial Public Offering (IPO).

Meanwhile, the bank has fulfilled 80 per cent of the remaining Tk.1.0 billion through private placement.

The bank itself will give Tk.200 million.

The SEC published gazette notification on March 11, in slapping curbs on private sale of mutual funds to individuals and companies in a bold move to boost small investors' stake in the capital market and rein in 'placement gangs' who made millions out of this skewed system.

According to revised criteria, the private placement of mutual funds will be locked-in for one year.

And fifty per cent of the total units of a fund must be offloaded in the IPO.

In January 25 last, the SEC approved the trust deed of JBFMF.

The SEC orally rejected the appeal for easing the lock-in period for the private placement of JBFMF.

On the other hand, the asset manager of the JBFMF said, "the SEC was in confusion in giving approval to our prospectus."

"When the regulator approved our trust deed there was no rule of lock-in for private placement. That's why now the SEC is in confusion and taking time for approval of our prospectus," Mashrib Zahid, chief financial officer of the RACE Management PCL, told the FE.

"But we will abide by the regulator's decision," he said. In the upcoming Commission meeting, the prospectus of the JBFMF is likely to be placed for approval.

The SEC officials, however, confirmed that the regulator would not go beyond the existing laws of mutual funds.

"The regulator would approve the prospectus of JBFMF giving lock-in period as per laws," an SEC official said.
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