Dr. PB to meet stock brokers today; says right balance key for regulation

Finance Ministry Secretary Dr. P.B. Jayasundera will meet today the members of the Colombo Stock Brokers Association (CSBA) as a follow up to President and Finance Minister Mahinda Rajapaksa’s original capital market stakeholder forum held a fortnight ago.

The meeting between Dr. Jayasundera and CSBA also comes a few days after he held a separate follow up meeting with officials of the Securities and Exchange Commission (SEC) and the Colombo Stock Exchange (CSE).

The members of the CSBA met last evening to discuss prioritisation of issues and key recommendations to be made during their meeting with Treasury Secretary today.

In a related development, Dr. Jayasundera yesterday told the regular breakfast meeting between President Rajapaksa and Editors at Temple Trees that striking the right balance was key for regulating the stock market.

“We need to develop the capital market by moving away from the extremes of unnecessary overregulation and a regulation-free environment.  We need to encourage ordinary people to invest in the stock market and also make it robust for raising of capital for private sector development,” Dr. Jayasundera said, when the President asked him to update following a question raised by an editor.

The Treasury Secretary said that the market must be stabilised and supported. He also emphasised that all stakeholders must take strength from the fact that there had been high net foreign inflows of Rs. 24 billion so far this year.

During his last week’s meeting, Dr. Jayasundera listened to presentations from the SEC and CSE highlighting their recommendations with regard to the way forward. He had suggested the need for more innovative ideas to revive the stock market.

At the capital market stakeholders’ forum on 13 July, which was also a pre-2013 Budget discussion, Jayasundera was directed by President to follow up with participants to iron out issues as well implement measures necessary to revive the market, which year-to-date has produced a negative return of 20%, on top 8.5% dip in 2011, as opposed to the bull run in 2009 and 2010 which propelled Colombo as world’s most consistent best performer.

Contrary to perceptions created that brokers and investors who met the President had wanted all regulations removed, most of the participants clarified that in reality the emphasis was that whilst the SEC could continue with its investigations and take action against those found guilty of malpractices, the regulator should refrain from driving fear among existing and prospective investors by mere talk or warning notices. On the other hand, the SEC has been on record that external pressure is imposed on the regulator when investigations are stepped up against suspected manipulations by some high net worth investors.

The 13 July forum at Temple Trees saw a verbal clash of different stakeholders levelling various allegations.

















Dr. PB to meet...

 He had suggested the need for more innovative ideas to revive the stock market.

At the capital market stakeholders’ forum on 13 July, which was also a pre-2013 Budget discussion, Jayasundera was directed by President to follow up with participants to iron out issues as well implement measures necessary to revive the market, which year-to-date has produced a negative return of 20%, on top 8.5% dip in 2011, as opposed to the bull run in 2009 and 2010 which propelled Colombo as world’s most consistent best performer.

Contrary to perceptions created that brokers and investors who met the President had wanted all regulations removed, most of the participants clarified that in reality the emphasis was that whilst the SEC could continue with its investigations and take action against those found guilty of malpractices, the regulator should refrain from driving fear among existing and prospective investors by mere talk or warning notices.

On the other hand, the SEC has been on record that external pressure is imposed on the regulator when investigations are stepped up against suspected manipulations by some high net worth investors.

The 13 July forum at Temple Trees saw a verbal clash of different stakeholders levelling various allegations.





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