Bangladesh Securities and Exchange Commission (BSEC) has increased the minimum stock market investment limit to enhance liquidity support in the capital market by eligible investors.
The commission has increased the limit of the minimum investment, to Tk1.5 crore from the existing Tk50 lakh, for approved pension funds, recognised provident funds, and approved gratuity funds.
It also increased the limit from Tk1 crore to Tk3 crore for other eligible investors in the capital market.
The commission made this decision in its meeting on Monday.
As a result, eligible investors will have to increase their investment in the capital market if they get an IPO quota. The conditions will be mentioned in the consent letter of each IPO prospectus.
The BSEC has also decided to ask the stock exchanges to register provident funds, pension funds, and gratuity funds as eligible investors after assessing the audited financial statements and bank statements of the funds.
Currently, the Dhaka Stock Exchange registers them if they have the fund registration certificate issued by the National Board of Revenue.
The DSE must also ensure that investments by the provident fund and gratuity fund would not exceed the total size of the fund.
Eligible investors – merchant bankers and portfolio managers, asset management companies, mutual funds and collective investment schemes, stock dealers, banks, financial institutions, insurance companies, alternative investment funds, market makers, and other institutions approved by the regulator – enjoy a 25% quota in the primary market.