Answer ... Yes, the Alternative Investment Rules require registration of all funds, trustees and fund managers in Bangladesh. Registration is granted by the BSEC on application.
Answer ... An alternative investment fund (AIF) must have the following structure:
- The minimum fund capital must be at least BDT 100 million and any subscription by a sponsor must not be less than 10% of the capital. The sponsors must also pay up at least 20% of the total subscription to the fund prior to registration.
- The minimum investment from the fund manager must be at least 2% of the fund capital. If the fund manager also acts as a sponsor of a fund, this investment must be made in addition to the 10% required as sponsor.
- Together with its connected persons, the fund manager must not hold more than 25% of the fund’s units at any point in time.
A sponsor must maintain a continuous investment of at least 2.5% of the fund capital and an AIF may declare cash dividends to unit holders only.
All investments in an AIF must be locked in for a period of three years from the date of issuance of the units. Additionally, an AIF must be established for a specific period of between five and 15 years, which may be extended for a further period of up to two years. Further, no AIF may have more than 200 subscribed investors.
In order to constitute an AIF, the requisite approval must be obtained from the Bangladesh Securities and Exchange Commission (BSEC).
Answer ... The fund manager and trustee must jointly apply to the BSEC to register the fund, submitting the requisite documents and the application fee. On receipt of the application, the BSEC will examine it for compliance with all requirements of the Alternative Investment Rules. If it considers that these have been fulfilled, it will register the fund and issue a registration certificate within 30 days of receipt of the application.
If the BSEC finds that any requirements set out in the Alternative Investment Rules have not been fulfilled, or that any additional submissions are required, it may, within 25 days of receipt of the application, direct the applicant to fulfil such requirements within such time as the BSEC may determine. Once the applicant has responded accordingly, the BSEC has 30 days in which to register the fund.