B Mirror Report: The Investment Corporation of Bangladesh (ICB) has expressed concerns that bringing its longstanding unit fund under the registration framework of the Bangladesh Securities and Exchange Commission (BSEC) could negatively impact investors and the capital market.

BSEC has recently taken a firm stance on bringing the country’s oldest unit fund under regulatory registration following the introduction of the Mutual Fund Rules 2025. Under the new rules, no fund can operate without commission registration and an approved asset manager.

In response, state-owned investment institution ICB has requested the Ministry of Finance to exempt its flagship “ICB Unit Fund” from the new regulatory framework.

In a letter sent to the authorities, ICB said the fund, established in 1981 with cabinet approval, operates as a special national savings and investment scheme under the ICB Unit Fund Regulations, 1981, formulated under the ICB Ordinance, 1976. As such, it has so far remained outside the BSEC registration process.

In March, BSEC directed ICB to initiate registration within 45 days and later issued an additional seven-day ultimatum after no visible progress. On May 5, the commission warned of legal action if compliance measures were not taken within the deadline, which expired on May 12.

Before the deadline, ICB informed the regulator on May 11 that the matter was under policy-level review by the government and that further steps would depend on the Finance Ministry’s decision.

ICB warned that registration under the new rules could sharply increase operational expenses. The annual management cost of the currently unregistered fund stands at around Tk 41.24 crore, which could rise to nearly Tk 78 crore under the new framework, potentially reducing dividends for unit holders.

The corporation also expressed concern that increased costs and changes in fund management could trigger a rise in unit surrenders. According to ICB, most investors in the fund are elderly and small savers seeking stable income, and abrupt structural changes could undermine their confidence.

As of June 30, 2025, the market value of the fund’s invested shares stood at approximately Tk 4,801.65 crore. ICB cautioned that a surge in unit redemptions may force the sale of listed shares to meet investor payouts, potentially creating pressure on the broader stock market.

Launched in 1981 with an initial capital of Tk 15.84 crore, the ICB Unit Fund has grown into a fund worth nearly Tk 4,909 crore. Since inception through fiscal year 2024-25, it has distributed a total of Tk 6,087.5 crore in dividends. Despite challenging market conditions, the fund recently paid Tk 30 dividend per unit, while the surrender value of each Tk 100 face-value unit currently stands at Tk 264.