Treasury to meet SEC, brokers to hasten demutualisation
Treasury officials will meet the Securities and Exchange Commission and stockbroker representatives next week to discuss fast-tracking demutualisation (the process through which a member-owned company becomes shareholder-owned) of the Colombo Stock Exchange (CSE), top Treasury officials said.
This process has been progressing slowly for a while owing to dissent between the SEC and brokers over the percentage that the latter should own after demutualisation, Treasury officials said. “The stockbrokers want more than 60 per cent in CSE (which is what the SEC is willing to part with) and argue that they deserve more as they started the CSE more than three decades ago without any assistance. But the regulator is adamant that 60 is the number. Each broker will get a maximum of 5 per cent if they agree to the 60 per cent,” one official said.
Demutualisation has been discussed for nearly a decade, Treasury officials say noting that it’s about time something actually happened.
The SEC Bill is to be presented to Parliament on January 25 and if passed will expedite demutualisation and establish a central counterparty clearing and settlement mechanism, provide for the development of new capital market products, and enhance investor protection.