By Jithendra Antonio
The Securities and Exchange Commission (SEC) of Sri Lanka in a surprising move yesterday announced that it decided to grant further relief in respect of the time granted to Stock Brokers to clear remaining 50% of debtor balance.
Accordingly, a directive by the SEC dated 29th November said that the deadline to clear credit given by brokers to customers till the end of the year, with 25 percent of remaining credit to be cleared by September 30.
When Mirror Business inquired about the extension of broker provided credit from June 30, SEC Director General Malik Cader said this is the first time the Directive was amended as brokers adhered to clear the credit by 50% by 31 March 2011, and then the deadline to clear off all credit by end of June 2011 was only extended.
However, the 29 November Directive which urged brokers to limit credit by December 2010 was further extended till June 2011 after broking community made representation to SEC last December.
The regulator, from January 01, 2011, has banned all stock broking firms from providing credit to customers and encouraged banks to provide margins.
The statement by the SEC said that decision to grant relief was based on improved market conditions, especially considering the fact that majority of the Stock Broking Companies have been able to reduce the risk exposure of debtors over T+3 days by 50% as at 31st March 2011 and due representations by market participants.
source - www.dailymirror.lk
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