4 banks get merchant-banking licence
Thursday, 12 March 2009

The Securities and Exchange Commission Wednesday allowed four banks including two government-owned commercial banks to run merchant-banking operations, an official said.

The government-owned banks are Sonali Bank and Agrani Bank.

"From private sector, Southeast Bank and Standard Bank got permission for merchant banking operations," SEC executive director Farhad Ahmed told reporters.

The market regulators at Wednesday's meeting also decided to issue an asset management licence to Prime Finance Asset Management Co. Ltd.

"The decision is in line with the SEC's effort to increase supply of mutual funds in the market," Farhad said.

Non-banking financial institution Prime Finance and Investment holds 40 percent stakes in the asset management firm.

Currently, Investment Corporation of Bangladesh (ICB), AIMS of Bangladesh, Venture Investment Partners Bangladesh, LR Global Assets Bangladesh, BSRS and RACE Asset Management Ltd are operating in the market.

The SEC also approved trustee deed and registration of EBL First Mutual Fund.

Eastern Bank Ltd is the sponsor of the Tk 100 crore mutual fund, while RACE Asset Management is the issue manager, according to the official.

"The next process is submission of prospectus for the IPO to SEC."

He added the size of the initial public offering would be 20 percent of the fund, that is Tk 20 crore.

The SEC also provisionally agreed on a code of conduct for credit-rating agencies.

Credit rating agencies are companies that do credit ratings for issuers of certain types of market instruments like IPOs and mutual funds.

"According to the code of conduct, the agencies have to make their rating methodology public by posting it on the website. They will have to include at least five senior analysts in their rating committee," Farhad added.

Source: bdnews24.com

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