Answer ... An alternative investment fund (AIF) must have a fund manager in order to be registered. The fund manager must be a company or statutory body, and should be registered by the Bangladesh Securities and Exchange Commission (BSEC) in accordance with the Alternative Investment Rules.
If a foreign entity or foreign fund management company intends to act as a fund manager in Bangladesh, it must establish a fund management company incorporated in Bangladesh, which must be registered under the Alternative Investment Rules.
Where a foreign entity or foreign fund management company applies to register a fund manager through a wholly owned subsidiary, the applicant must have a paid-up capital of at least BDT 150 million.
If a foreign entity or foreign fund management company applies to register a fund manager under the Alternative Investment Rules through a partially owned subsidiary, the applicant must have a paid-up capital of at least BDT 100 million.
The Alternative Investment Rules include no specific requirements for local directors or local general partners with regard to AIFs. Nor do they shed light on any other specific requirements regarding local substance, local directors or local general partners of an AIF.
Answer ... It is too early to address this question, as the industry is still in its infancy.
Answer ... Yes, they must be registered by the BSEC.
Answer ... A fund management company must be registered by the BSEC under the Alternative Investment Rules; no one can act as a fund manager to an AIF without such registration.
The fund manager must be a company or statutory body. The fund manager must have a paid-up capital of at least BDT 50 million. If an asset manager seeks registration as a fund manager under the Alternative Investment Rules, it must have a paid-up capital of BDT 50 million in addition to its paid-up capital requirements to operate as an asset manager, and must maintain a separate team with the required expertise and capacity to carry out fund management activities.
Answer ... The fund management company must apply to the BSEC for registration and submit the necessary documents, together with the application fee.
The fund manager must maintain financial statements as per International Accounting Standards and International Financial Reporting Standards, as applicable in Bangladesh, and must be audited as per Bangladesh Standards of Auditing.
Additionally, the fund manager must maintain satisfactory internal controls, written compliance and risk management procedures addressing all applicable regulatory requirements.
On receipt of the application, if all conditions have been satisfied, the BSEC will register the fund manager within 30 days of receipt of the application.
Answer ... No other requirements are known. However, given the authority of and power accorded to the BSEC, it may seek further clarification and documentation other than those specified in the schedule of the Alternative Investment Rules.
Answer ... The AIF manager may transfer the management of a fund to another licensed fund manager, subject to the approval of a majority of unit holders and approval of the BSEC.
While the rules do not specifically address whether the fund manager can impose restrictions on issues and redemptions, these may be subject to the fund’s investment guidelines and policy, which must also be approved by the BSEC.
Answer ... The fund manager may be a foreign entity or a foreign fund management company. However, it must apply for registration under the Alternative Investment Rules and must establish and register a subsidiary company in Bangladesh with a paid-up capital of BDT 100 million.
Answer ... Under the Alternative Investment Rules, a fund manager cannot delegate its fund management functions to any other person. It is thus our understanding that fund managers cannot outsource any fund management functions.
Answer ... Section 2(2) of the Alternative Investment Rules defines an ‘alternative investment fund’ or ‘fund’ as any fund established or constituted in Bangladesh in the form of a trust which is not covered under the Securities and Exchange Commission (Mutual Funds) Rules, 2001, or any other rules of the BSEC that regulate fund formation and management activities.
It may be deduced from above that the regulators have chosen to keep fund managers as a separate class under the Alternative Investment Rules.