Tuesday, 27 October 2020 18:51

SEC management laws to be overhauled soon

Sri Lanka Securities and Exchange Commission (SEC) management laws of the trading of securities are to be changed by enacting a new Act in parliament replacing the existing Act No.36 of 1987, SEC sources disclosed .

The present government’s Cabinet of Ministers has given its consent to the proposal submitted by Prime Minister as the Minister of Finance for directing the Legal Draftsman for the preparation of a draft bill for the introduction of a new Act.

The SEC Act, enacted in 1987, has been amended three times, in 1991, 2003 and 2009.the Cabinet decision to draft a new bill has been announced today four days after the e World Bank Country Director for Maldives, Nepal, and Sri Lanka, Faris Hadad-Zervos vist to Sri Lanka .

A consultation paper in 2012, funded by the World Bank, proposed new administrative and civil enforcement powers to deal with capital markets offences, most of which remain part of the discussion at present

Importantly, the SEC’s current mandate to enforce regulation is based solely upon criminal prosecution and the compounding of offences, with action limited to suspension or cancellation of licences,

At its core it laid the groundwork for the current SEC to regulate the securities market in Sri Lanka, including the granting of licences to stock exchanges, registering and managing market intermediaries and setting up a compensation fund.

While attempts have been made since 2009 to amend the act further, no resolution has been finalised as of early 2016.

(LIN)

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