Operations of 3 brokers curtailed over capital woes

Three stockbrokers operating at the Colombo Stock Exchange (CSE) have failed to fulfil the newly introduced risk-based capital requirements and as a result, their operations have been curtailed, Mirror Business learns. The CSE officials said the purchasing operations of the three stockbrokers have been suspended until they bridge the gap in their capital adequacy levels.

According to the new policy, stockbrokers are required to maintain at least 1.2 times the total risk it maintains as liquid capital, with a minimum of Rs.35 million, in order to better reflect the risks stockbrokers are undertaking and to account for their ability to honour their commitments.
Stockbrokers are now required to report their capital adequacy ratios to the Securities and Exchange Commission (SEC) and CSE daily, compared to the past practice of reporting net capital positions at the end of each month.