SEC relaxes rules on credit, broker trading

9 October 2012 03:24 am - 0 - {{hitsCtrl.values.hits}}

A A A

The Securities and Exchange Commission (SEC) yesterday decided to significantly relax rules on broker credit and restrictions on short-term trading by directors and workers of stockbroking companies.

According to a press statement issued by the SEC, during the 306th Commission Meeting held yesterday, it was decided to amend the net capital computation in order to relax the credit granted by stockbroking firms to their clients.

“In that the stockbrokers are now permitted to extend credit to their clients three times the adjusted net capital (i.e. net capital minus 50% of fixed assets) without having to deduct outstanding debtors from net capital,” the SEC said in its statement.

However, the stockbrokers are required to compute the net capital adjusting all unsettled purchase transactions (over T+3) to reflect the excess of cost over market value.

Further, the SEC stressed that brokers are required to ensure strict compliance with all rules and regulations applicable for extension of credit.

Meanwhile, the new SEC Commission, now headed by Dr. Nalaka Godahewa has decided to undo some of the regulations brought in during the immediate past Chairman, Tilak Karunaratne.

According to the SEC statement, the 20 percent upper limit on the crossings that was brought in by Karunaratne, prompted by the controversial NSB-TFC deal that was reversed later, has been removed with effect from today.

Also, the SEC has decided to lift the restrictions imposed on dealings by directors and owners of stock brokerages, which had also been prompted by the NSB-TFC deal.

Thus, the SEC has lifted the restriction imposed on executive directors, employees, their spouses and their nominees of all licenced stockbrokers and stock dealers from selling listed shares purchased from the secondary market for a period of six months from the date of purchase.

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Comments - 0

Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

SEC relaxes rules on credit, broker trading

Comments - 0

Add comment

RECOMMENDED

UDA owned land in Thalawathugoda; UDA Minister Prasanna Ranatunga under the spotlight for forceful occupation of reserved land

Loss-making SMIB faces political pressure in recovering loans

Baltimore Bridge Collapse: MV Dali, SL authorities anchored in mystery?

Has Sri Lanka become a potential hub for the illegal wildlife trade?

Spotlight on Moragahakanda Development Project Moragolla villagers lose livelihoods and down to one meal a day

Ambitious Sri Lankan jobseekers ‘trafficked into Ukraine war zones’

Western purple-faced langurs see blue!

Most Viewed in News

April 15 declared a government holiday

Complaint lodged over Piumi Hansamali's possession of Gota’s Range Rover

Street food vendor arrested for verbally harassing foreigner

Confusion remains if April 15 is a bank holiday

Belgian traveller scammed in Kalutara

23 year old youth ends up having his testicles removed

MIRROR CRICKET

Chamari Athapaththu sets big goal for T20 World Cup

How does CSK get best out of Pathirana?

Mendis, Mathews move up in ICC Test Rankings

Chamodi, Dewmi spins Sri Lanka U19 Women to big win

TODAY'S HEADLINES

Wild elephants pull down 16 telephone poles

Middleman arrested for price gouging at Kalutara eatery

Bondholders’ agreement delay won’t hinder IMF third tranche payout: Dr. Coomaraswamy

Party leaders to shoot down MPs request for concessionary duty free vehicle permits

Hardik fined Rs 12 lakh for violating IPL code of conduct after win over Punjab Kings

Chamari Athapaththu sets big goal for T20 World Cup

How does CSK get best out of Pathirana?

Mendis, Mathews move up in ICC Test Rankings