Viraj says adieu at SEC
Mr. Viraj Dayaratne
Securities and Exchange Commission (SEC) chairman Viraj Dayaratne is bidding adieu to his post this week.
He is the chairperson since late 2000 and is a lawyer by profession. Mr. Dayaratne has been instrumental in developing the local capital market when he started the Colombo Stock Exchange (CSE) digitalisation during the COVID-19 pandemic.
He appointed a joint committee comprising representatives from the SEC and the CSE to look into the end-to-end digitalisation of the stock market operations which was completed in three phases. The entire landscape of the capital market changed afterward, and now 95 per cent of accounts opened are through the CSE mobile App.
Apart from the CSE mobile app, key digital products launched after the digitalisation were enabling e-contract notes, e-Central Depository System (CDS) monthly statements, e-dividends, SMS alerts on trade executions, online validation of details through the Department for Registration of Persons (DRP), e- listed company annual reports, re-designed SEC, CSE and CDS websites, and biometric security.
They were the use of the CSE mobile application for CDS account opening for local companies via stockbrokers, CDS E-connect, and E-Initial Public Offerings (E-IPOs) on top of features such as the “chatbot” feature that would be added to enhance the user experience and convenience by providing account opening assistance and investor portfolio information assistance. Digitalisation also saw the SEC setting itself up on social media, such as Twitter, FB, and YouTube during Mr. Dayaratne’s time, making the capital market accessible to a wider range of audience.
One of the most important milestones, the SEC Act, 15 years in the making was spruced up and enacted which was possible after the direction of Mr. Dayaratne, who maintains the Act was merely spruced up from its earlier version, and not solely his effort. The new Act strengthened the framework for governing the capital market in modern times. Market intermediary rules and market institution rules were gazetted after the SEC Act.
It enabled products such as Green bonds, Blue bonds, Sukuk, and crowdfunding that were approved this year by the SEC.
Demutualisation of the CSE was made possible with the SEC Act and it will enable the Exchange to transit from a mutual association of exchange members operating on a not-for-profit basis to a limited liability, for-profit company, accountable to shareholders which would also provide them access to capital that can be used both for investment in new technology and other development initiatives. The year 2021 is considered the best year for the CSE in terms of indices, market cap, turnover, trades etc.
For the new school syllabus in the year 2023 capital market has been added from grade 6.
The regulator also provided a Three- Tiered Circuit Breaker structure to the S&P SL20 Index in April 2020.
Facilitating the implementation of the enhanced margining system Delivery versus Payment (DvP) mechanism at the CSE is another achievement, with the DvP system and margin model going live on August 16 last year to effectively manage post-trade risks prevalent in the market.
Last year SEC dealt a heavy hand to many market perpetrators, which former chairpersons were unable to do, bringing several high profile offenders for wrongdoing during the past years to task and warning others. Those operating social media ‘stock advisory’ accounts were also severely warned to ensure a level playing field.
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