Investor leaders have expressed concern that the mutual fund sector is heading toward a potential crisis, alleging that recent regulations issued by the outgoing Bangladesh Securities and Exchange Commission (BSEC) leadership could destabilize the capital market.

At a press conference held on Saturday at the Capital Market Journalists Forum office, leaders of the Bangladesh Capital Market Association claimed that the latest mutual fund regulations could severely damage the sector and urged authorities to repeal what they described as “controversial provisions.”

Speakers alleged that the previous commission led by Khondoker Rashid Maksud introduced “disruptive and harmful” rules related to mutual funds, margin trading, and IPOs, which they say have put nearly Tk 700 billion in investments at risk. They warned that such policies could lead to significant instability in the stock market within the next year if implemented.

They also claimed that the current regulations may push existing closed-end mutual funds toward liquidation or forced restructuring, which could trigger large-scale sell-offs in the market. According to them, this could increase supply pressure, weaken prices, and potentially drag the benchmark index down by as much as 1,500 points, further eroding investor confidence.

Investor representatives argued that more than 300,000 mutual fund investors would be affected and that long-term investors’ interests are being overlooked by limiting options in the restructuring process. They criticized provisions requiring a two-thirds majority vote for conversion or liquidation, saying that investors favoring continuation of funds are left without meaningful alternatives.

The speakers further alleged that the regulations were introduced without sufficient consideration of market conditions and warned of negative consequences for employment and overall market stability if large-scale fund liquidation takes place.

They also demanded a neutral investigation into past irregularities in the capital market, accountability for those responsible, protection of affected investors, and stronger governance and transparency in regulatory practices. Additional demands included investor-friendly policy reforms, measures to attract domestic and foreign investment, strict action against market manipulation, and safeguarding the rights of shareholders in troubled companies and merged banks.

The investor leaders called on the newly appointed commission to immediately suspend or repeal the Mutual Fund Regulations 2025 and introduce a more balanced framework to restore confidence in the capital market.