New CSE dispute resolution mechanism in the works
View(s):A new dispute resolution mechanism between investors and the stockbrokers is in progress. Now, dispute resolution is carried out at the Colombo Stock Exchange (CSE) and often, is seen as biased and not independent. The CSE appoints a panel for the initial hearing and if the parties involved are not satisfied, the dispute will go to a 3-member independent committee of the CSE board.
The issue many investors have with this is that as the CSE board has a majority of stockbrokers, this committee’s independence is also questioned.
”Now we are working on something in the lines of an arbitration where there’s a panel of arbitrators picked by the two parties involved,” Viraj Dayaratna, Chairman Securities and Exchange Commission (SEC) told the Business Times.
The model is that after the dispute is heard by the stockbrokers and the parties are not satisfied, it goes to the CSE Secretariat. If not resolved, the dispute will go to a panel of 10 members of which one or three members can be chosen to hear the dispute. “There is another tier where the parties can appeal and there is only one hearing in this instance,” Mr. Dayaratna said. He added that the two parties are granted the autonomy of selecting the panel and the hearing will not be protracted as specific timelines will be set. (DEC)