By Hiran H.Senewiratne
Stock brokers are now appealing to the Securities and Exchange Commission (SEC) to remove or review the T+5 Rule or five days deadline and the SEC has so far not given any response following repeated appeals from brokers and investors, stock market sources said.
"At present stock brokering firms have to go through difficult tasks due to forced –selling of more than 1000 client or a day because of the T + 5 Rule of the Securities and Exchange Commission (SEC)," leading stock brokering firm said.
However, when the Island Financial Review attempted to get SEC’s view on the matter there were no authorised persons to comment on the topic, its sources said.
The SEC is considering the removal of the five days deadline or T+5 Rule in the future with the constant request from stockbrokers and other investors to the SEC, official attached to Lanka Securities Ltd sources told The Business Review .
On 29 December 2010 the SEC issued a directive which mandated r stock brokering companies to force-sell by the T+ 5 ( transactions plus five days) , securities of buyers, which are in default of settlement by the T+3 Rule.
Therefore, from 7 January 2011 each market day became a T +5 force- selling day, which put every stock brokering company and local investors through a difficult situation whether the market goes up or down, stock brokers said.
With this new rule individual investors are going be affected with this rule because if one passes the five days dead line his/her shares will come under forced sell. This really put individual investors who do business in the Colombo Stock Market under tremendous pressure
A large number of local individual investors have increased significantly, which accounted for 44 per cent of the total stock market turnover, while foreign institutional buyers account only for15 percent of the total market turnover.
source - www.island.lk
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