The unit price of MBL 1st Mutual Fund (MBL1STMF) surged nearly 149 per cent in less than three months, prompting the Bangladesh Securities and Exchange Commission (BSEC) to order an investigation into suspected irregular trading in the fund.

The unit price rose from Tk 3.90 on June 28 to Tk 9.70 on September 10, marking an increase of Tk 5.80, or 148.7 per cent during the period.

Following the sharp rise in price and trading activity, the BSEC directed the Dhaka Stock Exchange (DSE) to conduct a detailed investigation into the trading of the mutual fund's units.

In a letter issued on September 10, the regulator said it had observed abnormal price movement and trading behaviour in MBL 1st Mutual Fund during the period from July 16 to September 1. The commission asked the DSE to investigate the trading from July 16 through September 10.

The investigation will seek to identify any coordinated, manipulative or non-genuine trading practices undertaken by the concerned investors, according to the BSEC directive.

The regulator also asked the DSE to examine whether any prohibited insider trading took place, including the misuse of unpublished price-sensitive information (UPSI).

It further instructed the exchange to examine compliance with margin rules and relevant BSEC notifications and directives by the concerned stockbrokers, stock dealers and their authorised representatives.

The BSEC specifically asked the DSE to determine the role and responsibility of the concerned brokers and dealers in facilitating or failing to prevent the suspected trades, particularly any involvement of Agranee Securities Ltd and Sheltech Brokerage Limited.

The exchange has been asked to identify any other relevant irregularities and submit a comprehensive investigation report within 30 working days from the date of issuance of the letter.

The BSEC also instructed the DSE to raise awareness among the concerned authorised representative, compliance officer and chief executive officer of the stockbroker/dealer about the suspicious trade execution and potential non-compliance with applicable securities laws and regulations.