What is the SEC?
The establishment and constitution of the Securities and Exchange Commission of Sri Lanka was initially provided for by the Securities and Exchange Commission Act No. 36 of 1987 (as amended by Act No. 26 of 1991 and Act No. 18 of 2003). The said Act has now been repealed and replaced by the Securities and Exchange Commission Act No. 19 of 2021.
What is the role of SEC?
Capital markets are a crucial part of an economy because they transfer money from the people who have to those who need it for productive use. i.e. long-term funds are raised by the business community and the public gets the opportunity to invest their savings for higher returns.
The SEC is tasked with regulating the capital market to ensure that the capital market is fair, efficient, orderly and transparent. To achieve these objectives the SEC maintains a regulatory framework that upholds quality disclosures, enhances corporate governance, prevents market abuse and promotes standards of conduct for market participants.
What are the main functions of the SEC?
- Grant licences or registrations to engage in regulated capital market activities
- Give general or specific directions to licensed or registered entities
- Regulate the listing and issue of securities on the Colombo Stock Exchange
- Investigate into any alleged violation or contravention of the provisions of the SEC Act, Rule and Regulations
- Review market disclosures and other information that listed companies are required to disseminate to the public to reduce asymmetry of information
- Supervise regulated entities to ensure on – site and off- site supervision on the financial viability and business conduct
- Issue general or specific directives to Listed Public Companies
- Regulate take-overs or mergers