New SEC Bill gets Cabinet approval

Thursday, 29 October 2020 00:47 - - {{hitsCtrl.values.hits}}

Legal draftsman to fine-tune new bill to replace existing SEC Act brought in 1987

Cabinet this week gave their consent to introduce a new Securities and Exchange Commission Act, which seeks to update existing regulations and modernise functions of the Colombo Stock Exchange (CSE).

The Cabinet of Ministers approved a proposal submitted by Prime Minister Mahinda Rajapaksa in his capacity as the Finance Minister to direct the Legal Draftsman for the preparation of a draft bill for the introduction of a new Act, replacing the existing Securities and Exchange Commission Act No. 36 of 1987.

The new legislation is expected to include new provisions required for international regulations to enable the Colombo Stock Exchange to operate accordingly.

In September, SEC Chairman Viraj Dayaratne PC told the Daily FT, that the SEC had refined the final draft, bringing greater clarity and removing ambiguity.

He said overall, the new bill will be a progressive new piece of legislation aimed at ensuring robust regulation, as well as facilitating the development of the capital market.

The original SEC Act No. 36 of 1987 has seen three amendments previously, in 1991, 2003 and 2009. Capital market stakeholders have been calling for a new Act for several years to ensure that regulation and market development keeps pace with modern era dynamics.

The SEC is confident of an early passage for the new Act, which is among a host of fresh measures to revitalise the capital market, broaden both the local and foreign investor base, increase listings and improve efficiency via digitalisation.

Among key developments dependent on the new Act is the long-awaited demutualisation of the Colombo Stock Exchange (CSE).

Dayaratne said the focus of the newly-constituted Commission members is to ensure healthy regulation for investor protection, risk mitigation and market development.

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