COPE commends the regulator for its performance, guarantees support
The Securities and Exchange Commission (SEC) Chairman Tilak Karunarante had insisted on independence when SEC appeared before the Committee on Public Enterprises (COPE) yesterday, Mirror Business learns.
According to sources, this request was made in response to a query by COPE Chairman D.E.W. Gunasekera asking how COPE should support SEC to carry out its duties.
SEC Chairman Tilak Karunaratne had told the COPE that SEC would like to come directly under the Parliament to ensure its independence, which was in return endorsed by the COPEChairman.
The SEC including its Chairman, Commission Members and the entire directorate were yesterday summoned to the Parliament by the COPE for a routine meeting which commenced around 3.15 pm and lasted for about two hours.
“The COPE was really impressed by the SEC’s work so far and also its performance,” COPE Chairman D.E.W. Gunesekara told Mirror Business. “We found that SEC Act needs amendments and the institution should be given more powers to tackle market misconduct,” he pointed out.
During the recent meeting between President Mahinda Rajapaksa and market stakeholders, former SEC Chairman Chari de Silva had said that SEC needed more teeth as for the last 25 years, the regulator had not sent any person guilty of market misconduct to jail.
“Everybody in the COPE agreed that 90 percent of the Colombo Stock Exchange is controlled by a handful of big investors and therefore the SEC should be given more powers to protect small shareholders,” Gunesekera said.
“And we told the SEC that the COPE will back them to the hilt in creating a market which ensures fair play and integrity,” he added.
The COPE during the meeting also found out undue delays on the part of SEC with regard to amendments, due to timeconsuming process involved, but assured the SEC that they will make a point to the Finance Ministry to speed up the process.
The sources further revealed that the consensus amongst the COPE members was that the Colombo bourse was loosely regulated, which United National Parliamentarian and COPE member Eran Wickramaratne openly mentioned during the meeting.
However, sources said that UNP Parliamentarian and COPE member, Dayasiri Jayasekera was against this view, and stated that the Colombo Stock Exchange is overregulated.
Sources also revealed that UNP Parliamentarians extensively questioned the SEC about the so-called market mafia, a fact that SEC acknowledged but refused to disclose any names.
Apart from that they had tried to extract information about the controversial investments the Employees’ Provident Fund has made in the Colombo bourse and the scandalous NSB-TFC deal.
However, according to sources, the SEC was able to make the COPE members realize that the EPF investments and NSB’s controversial purchase of TFC shares at a premium price didn’t fall under the SEC’s jurisdiction.
However, in response to a query as to why the SEC reversed the NSB-TFC deal, the SEC Chairman Tilak Karunaratne had told COPE members that such an action was taken to avoid systemic risk that could have been arisen from a bad example set by the state-owned savings bank.