The Securities and Exchange Commission (SEC) should facilitate proper discipline and nurture the stock market while creating broader investor awareness, according to Channa de Silva, Director General SEC who will be quitting the regulator’s post shortly after completing five years.
“The way forward is to support the development of small scale businesses and enabling them to list in the second board,” he told the Business Times in an interview, adding that this board, now termed the Diri Saviya, was introduced last year to help this cause. “Now small firms with a share capital of Rs 35 million can be listed,” he said, adding that facilitating more growth in the stock market is important than tightening of regulation in this post war economy.
Channa de Silva |
He said that promoting listing of at least 25 Initial Public Offerings which are of high and medium capital should also be facilitated in the near term. “There is a need to spread Internet trading to more households which will also improve more day trading,” Mr. De Silva noted.
He also said that it’s important to strengthen independent research firms while also encouraging large financial media in order to develop the capital market. He noted that last year the SEC successfully completed the Singapore road show to promote the Colombo Stock Exchange (CSE). “The institutional fund managers who attended the forums are now investing in the CSE,” he said, adding that the SEC has also strengthened the stock broker licensing programme and introduced computer based examinations to the stock brokers.
Mr. De Silva said that SEC’s surveillance system is currently in the process of being installed. ‘The total surveillance system has been procured by Millennium IT and this will address any concerns pertaining to any unfair practices of investors,” he added. He said that the CSE will open its Jaffna branch on Tuesday, while noting that the regional branches are now accounting for a sizeable contribution in turnover for CSE.
He said that through new amendments to the SEC Act derivatives were introduced and now the CSE is engaged in a process which will lead to introducing derivatives. “We made corporate governance mandatory for all listed firms compelling the introduction of independent directors, non-executive directors, audit committees and remuneration committees along with other disclosures being made mandatory for all listed firms,” he said.
He noted that SEC has strengthened its ability to regulate by providing directives to firms to ensure proper transparency and good governance in listed entities. |
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