Country's first ETFs: UK-based Dawn Global Management to provide technical support

| Updated: June 28, 2022 20:50:58

Country's first ETFs: UK-based Dawn Global Management to provide technical support

UK-based Dawn Global Management Ltd has expressed its interest to provide necessary technical support and training in knowledge transfer for launching the country's first exchange-traded funds (ETFs).

A five-member team led by Maurits Pot, Founder & CEO of Dawn Global Management, showed their interest after holding a meeting with Prof Shibli Rubaiyat-Ul Islam, chairman of Bangladesh Securities and Exchange Commission, on Sunday at the BSEC office.

BSEC commissioners Dr Shaikh Shamsuddin Ahmed and Dr Mizanur Rahman were also present at the meeting, among others.

Mr Maurits has also shown interest to make investments in the country's maiden exchange-traded funds, according to a BSEC statement.

Dawn Global Management is a leading firm in the field of ETF product launching and management in the frontier market.

An ETF is a type of pooled investment security that operates much like a mutual fund. Typically, ETFs will track a particular index, sector, commodity, or other asset.

But unlike mutual funds, ETFs can be purchased or sold on a stock exchange in the same way that a regular stock can.

"The introduction of ETFs will require market makers and Dawn Global Management also showed interest in providing technical assistance to the market makers," the BSEC statement said.

Some well-known firms have also expressed interest in obtaining market-maker certificates, said a BSEC official.

The operating expenses for the formation of ETFs would be kept to a minimum by international standards, which will help investors to get maximum returns, said the BSEC.

"ETFs are a less risky and much safer investment instrument," said Mr Shibli. He expressed hope the ETFs would become a very popular investment product among investors.

Mr Shibli hoped that the launch of this new investment product will play an important role in stabilising the market, creating diversification and increasing liquidity flow in the market.

BSEC chairman assured that the commission would provide fast-track services to the institutes that showed interest in issuing ETFs and issuing certificates to market makers.

Meanwhile, Dhaka Stock Exchange (DSE) has recently announced that it is going to allow asset managers to launch ETFs, which would invest in certain indexes, primarily the DS-30, the blue-chip index.

LankaBangla Asset Management, Shanta Asset Management, and Green Delta Dragon Asset Management have recently shown their interest in becoming a sponsor of an ETF, and already submitted proposals to this end, officials said.

"The DSE is working so that at least one or two ETFs can be introduced by September this year," said Tarique Amin Bhuiyan, managing director of the DSE, in a press briefing held on June 1, this year.

The size of an ETF would be a minimum of Tk 500 million, of which 10 per cent will be funded by sponsors and 2.0 per cent by the asset management company. The rest can be raised from the public.

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