The Bangladesh Securities and Exchange Commission (BSEC) has directed Central Depository Bangladesh Limited (CDBL) to develop an integrated software system aimed at modernizing custodian services in the country’s mutual fund sector through faster, more transparent, and technology-driven operations.

The directive was issued recently by BSEC’s Mutual Fund (MF) and CISS Department under its Investment Management Division and was subsequently sent to the Managing Director and Chief Executive Officer of CDBL.

According to the regulator, the decision follows a meeting held on March 12 between BSEC and CDBL representatives at the commission’s headquarters to discuss the implementation of the Bangladesh Securities and Exchange Commission (Mutual Fund) Rules, 2025. During the meeting, the commissioner overseeing the Investment Management Division emphasized strengthening CDBL’s operational capacity and recommended the development of a modern integrated software platform to efficiently manage mutual fund custodian services.

BSEC has instructed CDBL to consult all key stakeholders in the mutual fund industry including asset managers, trustees, custodians, and stock brokers during the software development process. The regulator also directed the company to incorporate stakeholders’ feedback into the system and begin development immediately to ensure compliance with the 2025 Mutual Fund Rules.

Additionally, CDBL has been asked to submit progress reports on the software development to the commission every two weeks.

Market participants believe the integrated digital platform will improve asset custody, transaction settlement, information sharing, and coordination among institutions involved in the mutual fund industry. They expect the initiative to enhance the efficiency of custodian services, reduce operational risks, and accelerate the implementation of the new mutual fund regulations.

The move is also seen as part of BSEC’s broader strategy to digitize and automate capital market operations.

CDBL, the country’s sole electronic securities depository, has already expressed interest in providing mutual fund custodian services and has applied to BSEC for the necessary license as part of its efforts to diversify revenue sources.

However, industry sources said CDBL has yet to fulfill several key eligibility requirements for registration as a custodian under the new Mutual Fund Rules, 2025. BSEC has therefore instructed the company to address these gaps promptly to facilitate the licensing process.