To enhance investor protection and transparency, the Bangladesh Securities and Exchange Commission (BSEC) has introduced the “Bangladesh Securities and Exchange Commission (Mutual Fund) Rules, 2025,” with the gazette notification published on November 12.

Under the new regulations, no new closed-end or fixed-term mutual funds will be approved. Existing closed-end funds that fail to maintain their market price may be liquidated.

Investors in open-end mutual funds will have the flexibility to buy or sell units at any time, while fund managers must publish the Net Asset Value (NAV) of each fund daily, providing investors with real-time insights into fund performance.

Special provisions apply to closed-end schemes. If a fund’s average market price per unit falls more than 25% below its NAV or purchase price within six months, the trustee can convene an Extraordinary General Meeting (EGM).

With approval from three-fourths of votes and BSEC’s consent, the fund may either convert into an open-end fund or be liquidated. Asset managers are responsible for operating the fund, while trustees ensure the security of assets and monitor all fund transactions. All asset managers, trustees, and custodians must be registered and approved by BSEC.

All funds must prepare financial statements in compliance with International Financial Reporting Standards (IFRS) and undergo annual audits by independent audit firms.

Fund operations, income, expenses, investment risks, and valuations must be disclosed regularly. Concealing price-sensitive information from investors is punishable. Funds may invest only in securities listed on the main board and SME platforms of stock exchanges

Securities offered through IPOs or rights issues intended for listing. Listed debt or Shariah-compliant securities with a minimum credit rating of “A”.

Investments in delisted, OTC-traded, or unlisted securities are prohibited. If a listed security is delisted or downgraded below “A” after investment, the fund must withdraw or liquidate it within six months.

Funds must also submit detailed quarterly reports on their portfolio and investments to BSEC. Existing registered mutual funds and schemes must comply with the new rules within six months of the gazette’s publication.