Private firms cannot be a sponsor of any mutual fund with the investments of their provident funds, according to a decision of the Bangladesh Securities and Exchange Commission (BSEC) taken yesterday.

On this ground, the stock market regulator refused giving go-ahead to CAPITEC Popular Life PF Unit Fund.

Mutual funds are investment funds that gather a fixed amount of money from a number of investors, including sponsors, and reinvest those into stocks, bonds and other assets.

The BSEC said it has recently approved the unit fund, the sponsor of which, Popular Life Insurance Employees Provident Fund, invested Tk 1 crore. “As stock market investment is risky so the commission asked the fund manager (CAPITEC Fund Management Ltd) to get approval from the beneficiary of the provident fund about the investment.”But, the fund manager submitted approval of the trustee board instead of the members of the provident fund, the commission said.

Considering the speculation and risks, members of any provident fund do not want to invest their money into stocks, a senior official of the BSEC said.