SEC chief asks brokers to be more disciplined

SEC Chairman Dr. Nalaka Godahewa has asked brokers to be more disciplined when conducting their businesses, telling them that ongoing investigations would be concluded as fast as possible. Senior officials of the SEC held discussions with members of the broker community last week which were both cordial and positive,SEC Assistant Director External Relations and Market Development Tushara Jayaratne told The Island Financial Review.

Dr. Godahewa first gave the floor to the brokers, inviting them to share their concerns and suggestions.

Responding, brokers said they were upbeat about the market’s recent performance which they said was a significant improvement.

They requested the SEC to reconsider the formula under which brokers could dispense credit so that they could extend more credit facilities to their clients.

Brokers also wanted the SEC to allow them to trade in the market within normal parameters.

They wanted market development programmes to be formulated with their input and initiated jointly with the Colombo Stock Exchange and the broker community.

A national task force was also mooted to develop the capital market.

Brokers also asked the SEC to come up with a credible solution to overcome settlement risk in the market and formulate a strategy to provide broker firms concessions so that they could develop infrastructure.

Dr. Godahewa then invited the broker community to submit their concerns and proposals in writing.

Dr. Godahewa went on to say that the SEC would function within the framework stipulated by the SEC Act and develop the country’s capital market so that it would benefit all stakeholders.

He then drew the attention of the brokers to the need for being more disciplined in carrying out their professional duties. To this the brokers agreed that they would implement self-surveillance mechanisms and agreed that a proper code of conduct for brokers needed to be formulated.

Dr. Godahewa also said much needed to be done to educate the public on the equities market.

He told the brokers that investigations would continue with timelines. He had earlier told SEC staff that investigations should be concluded within three months.

Former Chairman of the SEC Thilak Karunaratne had said there were 17 investigations ongoing. He resigned citing pressures from an influential group of high net worth investors who were well connected. Less than a year ago another Chairperson of the SEC Ms. Indrani Sugathadasa resigned as a matter of principle after the then SEC Director General Malik Cader, who was tough on market offenders, was removed from office.

source - www.island.lk