SEC to acquire new market surveillance system
Sri Lanka’s capital market regulator, the Securities and Exchange Commission (SEC) will implement a new supervision system to effectively monitor and regulate the market, thereby boosting investor confidence and promoting a fair and transparent trading environment.
“This system was awarded last month and it will be able to handle the increased trading volumes and the complex nature of modern trading strategies. This upgrade is crucial to ensure the smooth operation of the capital market and to prevent fraudulent activities. The real-time surveillance system will be able to monitor all trading activities and detect any suspicious or unusual trading patterns. It will have the capability to generate alerts and reports for further investigation. With the introduction of CCP (Central Counterparties), the surveillance system will also be able to monitor the settlement process and ensure its efficiency and accuracy,” Faizal Salieh, Chairman SEC told The Sunday Times Business
on Thursday.
The upgraded surveillance system will also be equipped with advanced analytics tools to analyse trading data and identify any potential market manipulation or insider trading, he elaborated in an exclusive first-time media interview. “The real-time surveillance system will be able to analyse large volumes of data in real-time, making it more effective in detecting market abuses. It will be able to monitor all trading activities and detect any suspicious or unusual trading patterns. It will have the capability to generate alerts and reports for further investigation. With the introduction of a CCP, the surveillance system will also be able to monitor the settlement process and ensure its efficiency and accuracy.”
The SEC revised and strengthened the rules on corporate governance for listed entities and market intermediaries, after a lapse of 15 years, bringing the market abreast with the developments in comparable jurisdictions and taking into due consideration existing and emerging governance risks, and introduced a scheme of financial fines and administrative sanctions for rule breaches, based on the proportionality principle, to ensure market discipline and greater investor trust and confidence. “Most of these revised rules are effective from Oct 2024, and some with effect from Jan 1, 2025. We’ve adopted a proactive regulatory intervention approach where we directly engage with board directors when we see continuous red flags in the company’s operations, rather than always resort to reactive regulatory enforcement actions,” Mr. Salieh said.
Despite being aware of the negative perceptions, people had about the SEC and the capital market, the institutional culture and the huge enforcement deficit that existed, Mr. Salieh said that his appointment to the hot seat in February 2023 was an opportunity to serve the country.
“I am thankful that we have a professional, competent and independent-minded team of Commissioners who have no personal or political agenda. This has immensely helped the Commission carry out its regulatory role and responsibilities without fear or favour. Every one of them has demonstrated their commitment and ability to work in the best interests of the institution, the capital market and the country. I must say that we have thus far not had any outside political influence or interference in discharging our duties as a Commission.”
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