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SEC urges listed companies to appoint compliance officers

2014-01-21 05:06:40
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Sri Lanka’s capital market watchdog, the Securities and Exchange Commission (SEC), urged all public listed companies to appoint an officer for the purpose of monitoring the particular company’s compliance with the SEC regulations.

Addressing a recent forum, SEC Legal and Enforcement Director Ayanthi Abeywickrama pointed out that it was the duty of a listed entity to ensure, at all times, that its compliance with the specific rules are ensured.

She was specifically referring to the new minimum public free float requirements and related party transaction disclosure rules that came into effect recently.

“You need to appoint an officer who is dedicated towards this task, who will monitor compliance. Having a compliance officer is becoming more and more important on a dayto-day basis in the present context,” she said.

However, questions were raised from the audience as to how practical this would be considering the various cost factors involved, which would have to be borne by the company. “We understand that it is a challenge to monitor thousands of employees. If you’re a listed public company, this is a big responsibility and it is not to be taken lightly,” Abeywickrama noted.

She further pointed out that just one employee for a public listed company is not going to be a costly affair and stressed that when a company makes a decision to become public, it comes with the responsibility for compliance. “We are not asking you to employ a person for the sake of employing. First you must see if you can comply with it without an additional overhead and do so if you can,” she said.

She further emphasized that compliance is very important and should not be compromised. According to Abeywickrama, it will not come as a very high transactional cost if a company has to employ just one more employee.

“I understand there will be difficulties and it won’t be an easy task. But it’s important in having staff dedicated towards compliance because you are a public listed entity,” she noted. (KP)


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