Sat, 24 Jul 2021 Today's Paper

Stockbrokers say ‘No Problems Sir!’

17 September 2012 02:51 am - 1     - {{hitsCtrl.values.hits}}

A A A


The meeting between SEC officials and stock brokers in progress (Picture courtesy SEC)

The appointment of Dr.Nalaka Godahewa as the Securities and Exchange Commission Chairman seems to have been able to cast out all the grievances the stockbrokers have had, even perhaps to the utter surprise of Godahewa himself.

During the meeting heads of the stock broking firms—inclusive of those who are not members of the Colombo Stock Brokers Association (CSBA)—had with the new SEC Chairman and the senior management last Friday, the brokers stated that there were no major concerns that they should bring into the regulator’s notice.

They also told the SEC that they were really upbeat and happy about the market performance during the last couple of weeks.

This was quite contrary to the past behaviour of the CSBA who met the President Mahinda Rajapaksa twice to air their grievances about the country’s capital market. ‘More credit’ and relaxing of rules were their main demands.

In fact, the issues they pointed out during the meeting were quite profound as opposed to their demands and suggestions to the SEC under Indrani Sugathadasa and Tilak Karunaratne and to President Rajapaksa in two occasions.

Incidentally A powerful investor termed most of the demands and suggestions of the broking community as ‘childish and worthless’ in a recent media conference.

According to Tushara Jayaratne, Assistant Director External Relations and Market Development at SEC, who was authorized to talk to the media in this reguard, the brokers during the meeting requested the SEC to consider re-evaluating the equation for calculating the net capital.

They also requested the SEC to allow brokers to trade within the normal parameters of the market.

In the aftermath of the infamous NSB-TFC deal, the SEC last May said that market intermediaries would not be allowed to engage in trade below six months from the purchase date (except in IPOs) and crossings would be limited to 20 percent above market price.

Jayaratne also said that brokers urged the SEC to have a credible solution to the settlement risk in the Colombo bourse.

Both the SEC and the Colombo Stock Exchange (CSE) have said that a Central Counter Party (CCP) system would be put in place shortly to mitigate settlement risks.

The brokers have also insisted the need for market development programmes and investor education.

“They emphasized the need to conduct market development programmes and to have a consultative process. They also wanted to these programmes to be held with the participation of all three parties, the SEC, CSE and them,” Jayaratne said.

He also said that the brokers noted the need for a national task force to map a long term capital market development master plan. From time-to-time, both CSE and SEC have come up with capital market plans, spanning from 5 to 10 years, though they had not been implemented properly.

The brokers also requested the SEC to grant them monetary concessions to improve their infrastructure which included back office operations.

In response, Dr. Godahewa had told them to submit their suggestions in writing and stressed that SEC will assist and safeguard all market stakeholder interests.

He also urged the brokers to be self-disciplined in conducting their duties and in reply the brokers told the SEC that they wanted to explore the possibility of surveillance at their level. They further agreed to improve their code of conduct.

Godahewa also told the brokers that SEC will carry out its businesses according to the mandate given by the SEC Act, and investigations will continue as usual, but with specific time frames.

Sri Lanka’s capital market ran into controversy with the resignation of two SEC Chairmen within less than one year. Indrani Sugathadasa, who was the wife of President’s Secretary, said her resignation was carried out to ‘uphold principles’ while her successor, Tilak Karunaratne told media he was pressurized to step down by the powerful investors who had links to higher authorities, as he ordered the re-commencement of certain investigations that were put on hold.

Following the resignation of Karunaratne, the retailers and high net worth investors were seen returning to the market to join foreign investors who were already present and had been net buyers.

Since the appointment of Dr.Godahewa on August 24, the main All Share Price Index has risen 18.2 percent resulting in Bloomberg ranking Colombo bourse as third best performing market.

However, Dr.Godahewa’s appointment to the SEC did not bring any revision to SEC rules and regulations or there hadn’t been any positive change in the macro economic outlook of the country.

In fact Sri Lankan economy is seen slowing down amidst shrinking export income and tight monetary policy actions implemented by the Central Bank. In a recent interview, Treasury Secretary Dr.P.B. Jayasundara told Reuters that Sri Lankan economy will grow between 6.7 to 7.2 percent in 2012. The original development target set by the central Bank for 2012 was 8 percent.

Meanwhile, to independent analysts, Dr.Godahewa has a strong case of ‘conflict of interest’ against him in carrying out his duties as the SEC Chairman, being the Chairman of a listed firm and closely associated with powerful investors.
See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

  Comments - 1

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

 

  • Gamarala Monday, 17 September 2012 05:46 PM

    God bless all the Lankan.


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.

Reply To:

Name - Reply Comment


Basil Rajapaksa’s catch 22 situation

Sri Lankan politics has been a good deal of family business. It was not even

“This govt. printed Rs. 880 billions”

This is the roadmap of Zimbabwe

“We are on the cusp of a mothers-led movement for better birth rights in Sri Lanka” – Kanya D’Almeida

Writer Kanya D’Almeida became the first Sri Lankan to win the ‘Commonweal

Two diametrically opposite shows in a military regime

On July 8 (Thursday) we saw diametrically opposite results because the securi



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