May 19, 2011 (LBO) - Sri Lanka's securities watchdog has relaxed a 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.
Sri Lanka's stocks rose sharply last year amid loose monetary policy and credit both from banks and brokers, though fundamentals also improved following the end of a 30-year war and lower interest rates.
The Securities and Exchange Commission had originally wanted to brokers to end client exposure earlier.
The SEC said in a statement Thursday that the deadline was extended on "improved market conditions" and that "majority" of stock broking firms have cut exposure to debtors to 50 percent by March 31 and "representations made by market participants."
The SEC had earlier given a deadline of June 30 to clear broker credit, which was also an extension from the original deadline.
Here is the full statement :
DIRECTIVE UNDER SECTION 13 (c) OF THE SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA ACT NO. 36 OF 1987 (AS AMENDED)
Further to the Directive of the SEC dated 29th November 2010 (SEC/LEG/10/11/77) the Securities and Exchange Commission of Sri Lanka at its 278th Meeting held on 13th May 2011 has decided to grant further relief in respect of the time granted to Stock Brokers to clear their remaining 50% of the debtor balance as follows:
1. 25% of the above remaining debtors over T+3 days to be cleared by 30th September 2011; and
2. The balance 25% to be cleared by 31st December 2011.
As such the Directive of the SEC dated 29th November 2010 (SEC/LEG/10/11/77) stands amended accordingly.
The Colombo Stock Exchange is also directed to disseminate this Directive of the SEC to all members of the Colombo Stock Exchange.
Malik Cader
Director General
source - www.lbo.lk
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