Non-banking financial institutions (FI) can now invest in the non-listed special purpose funds (e.g. Alternative Investment Fund, Special Purpose Vehicle, or any other similar fund) which are registered with Bangladesh Securities and Exchange Commission (BSEC). Through DFIM Circular No.04 dated 30 March 2016, Bangladesh Bank allows such investment.
On November 24, 2015, Bangladesh Bank issued a similar circular allowing the commercial banks to invest in such funds.
FI should follow the following guideline while investing in the non-listed special purpose funds:
1. The aggregate investment in such funds made by any FI shall not exceed 50 percent of its paid up capital.
2. The investment in such a single fund made by any FI shall not exceed 10 percent of its paid up capital or 20 percent of that particular fund, whichever is lower.
3. The investment decision in such funds must be approved by Board of Directors of FIs and before making commitment to invest FIs shall obtain approval from Bangladesh Bank (BB). In this connection, FIs shall submit their latest information on capital, liquidity, quality and quantity of assets and liabilities along with all the information related to above mentioned funds (including the declaration of clause 4) to BB.
4. The trustee of the fund shall declare that:
a. No investment shall be made to purchase the share/debenture/bond or any other instruments of investor FI and its related party by such funds;
b. The fund has no financial claim over any bank and FI and no investment shall be made that may create such claim over any bank or FI in future.
5. Investment in such funds shall be excluded from the limit mentioned in section 16 of the Financial Institutions Act, 1993.