B Mirror Report: The Bangladesh Securities and Exchange Commission (BSEC) has fined asset management company Race Management PLC Tk 5 lakh for failing to submit its audited financial statements for the 2022-23 fiscal year within the stipulated timeframe.

The securities regulator imposed the penalty under Rule 33(3) of the Securities and Exchange Commission (Mutual Fund) Rules, 2001, according to a recently issued enforcement order.

Under the rule, an asset manager is required to submit audited financial statements to the commission, trustee and custodian within three months of the end of each financial year.

The BSEC said Race Management failed to submit its audited financial statements for the years ended June 30, 2022 and June 30, 2023 within the prescribed period.

The company’s representatives appeared at a hearing and argued that it had regularly submitted audited financial statements of the mutual funds under its management. It said 57 such statements had been submitted to the commission over the previous five financial years.

Race Management also argued that Rule 33 should not apply to its own financial statements, saying the assets managed by an asset management company remain outside its balance sheet.

The BSEC, however, rejected the company’s explanations and concluded that Race Management had violated Rule 33(3) by failing to submit the required financial statements on time.

The commission said the violation constituted a punishable offence under Section 18 of the Bangladesh Securities and Exchange Commission Act, 1993.

The Tk 5 lakh fine was imposed in the interest of maintaining discipline and transparency in the capital market and protecting public interest.

Race Management has been directed to pay the fine through a bank draft or pay order in favour of the commission within 30 days of the order. Failure to pay within the stipulated period may result in further legal action under the securities laws.