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Amended SEC Act by 2014?

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The head of Sri Lanka’s capital market regulator, Securities and Exchange Commission of Sri Lanka (SEC), Dr Nalaka Godahewa last week said that he expects the amended SEC Act to be tabled in Parliament by the end of this year or early next year as the technical work on the amendments have been completed.

“We have finished our part of the work and we are now expecting the final feedback from the Attorney Generals’ Department and from the consultants from World Bank. Once they give us the feedback, it will then be presented to the Commission members at the meeting for approval and then sent to the legal draftsman’s office which I hope will happen in the next two months”, Dr. Godahewa said.

Meanwhile, the SEC Chairman who delivered the keynote presentation at the 12th LBO-LBR Chief Financial Officers (CFO) Forum said the amended Act will support the introduction of new products and enhance the regulatory framework.
“The amended Act will facilitate regulation of demutualized exchanges and facilitate the establishment of a Central Counter Party. It will also introduce civil sanctions and administrative sanctions to deal with capital market offenders”, Dr. Godahewa noted at the Forum held at the Taj Samudra last week.

He pointed out that as demutualization requires amendments to the existing SEC Act and even a separate demutualization Act, drafts acts are now ready. But he said that as the demutualization process requires further technical assistance, the SEC is presently talking to the Asian Development Bank (ADB) for assistance.

“Demutualization of the CSE will give the Exchange the opportunity to position itself better to respond to the interests of its stakeholders and become more competitive and customer driven”, the SEC Chairman added.
However, according to a capital market analyst, although plans to amend the SEC Act in a bid to give more teeth to the regulator have been expressed by previous Chairpersons in the past and at different stages of their tenure, none of the heads at the top have succeeded in terms of implementation.

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