In the clarification, the ICB says it is not true that ICB's unbundling has not been successfully implemented, which was mentioned in the report that was based on an ADB Operations Evaluation Mission draft report.

“All the conditions stipulated in the Capital Market Development Programme loan agreement including creation of three subsidiaries to carry out merchant banking, mutual fund operations and stock brokerage activities as per the plan accepted by ADB, has been implemented."

ICB is not considering winding up any mutual fund simply because those play critical role in the maintaining the breadth and depth of the market. Any contemplation of winding up would be detrimental to the market, the ICB said.

The clarification says the issue of transferring assets from ICB to subsidiaries is not pertinent. Transfer of assets has legal complexities.

"Moreover, it was an understanding between the ADB and the government that the subsidiary companies should be run in an independent and commercial manner and shall undertake new business only and accordingly legal provisions were amended in the ICB Ordinance."

ICB feels that further changes in laws with the recommendation may not yield desired results.

"The fiduciary obligations to the investors and legal impediments with regard to transfer of ICB mutual funds should be considered for the benefit of the investors and the capital market as a whole," the corporation observed.

“It should be noted that the assets of the mutual funds are of the investors. ICB is only the managers of those funds. So the willingness and the decisions of the investors and the declaration made through prospectus are more important to guide the management of these funds. Therefore, the comments on defiance of rules are only to shift the attention from the fact that there has been no response from the private sector to launch mutual fund."