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the fund will be converted into an open-end mutual fund. The amended regulations complete six months in force this week.

An analysis of Dhaka Stock Exchange data shows that most closed-end funds are already trading at a discount of more than 25 percent to their six-month average net asset value. This means many could now face a vote on conversion.

Abul Kalam, spokesperson for the BSEC, also said that under the rules, funds may face conversion or winding up.

If the decision comes in the meeting to convert them into open-ended funds, it will ensure the interest of investors as they will be able to get back their funds at NAV any time, he said.

In winding up, Kalam said there is a tax issue, and investors will get only the fund that the fund manager gets by selling their holdings.

In an order issued on May 7, the regulator outlined the conversion process.

According to the order, an asset manager may also initiate a proposal for voluntary conversion. However, the board of trustees must approve the plan after ensuring that unitholders’ interests are protected.

Trustees must take a decision on any voluntary conversion proposal at least 150 days before the fund’s maturity.

They are also required to publish notices as price-sensitive information in at least two national newspapers, one in Bangla and one in English, as well as on an online news portal and on the websites of the stock exchanges, trustees and asset managers.

The notice must include the record date, the date from which trading will be suspended, the effective date of conversion and the date of the special general meeting.

Only unitholders whose names appear in the depository or unitholders’ register on the record date will be eligible to vote in the meeting.

Under the order, trading in the units of the relevant fund will remain suspended from the record date to preserve the integrity of the voting and conversion process.

The BSEC also stipulated that any conversion proposal must be approved by at least three-quarters of unitholders, calculated on the basis of units held.

If the proposal fails, trading the fund’s units will resume on the next trading day. The trustee will hand over all assets to the custodian, while management will remain with the existing asset manager.

The order further said that if conversion is approved, the newly selected asset manager will bear the costs of holding meetings and the trustee fees related to the process. If the proposal is rejected, the existing asset manager will pay those expenses.

The commission has capped trustee fees for a single conversion scheme at Tk 10 lakh.