SEC Commission meeting today; brokers upbeat

Monday, 8 October 2012 00:40 -     - {{hitsCtrl.values.hits}}

The Commissioners of the SEC are scheduled to meet today, where relevant written proposals submitted by Colombo Stock Brokers Association (CSBA) are expected to be considered.

Today’s meeting is the second since Dr. Nalaka Godahewa took office as the Chairman of the Securities and Exchange Commission (SEC) in late August.According to broking firms, the CSBA had submitted around 10 proposals for capital market development following its meeting with the SEC.

This was as part of SEC's consultative process.

Separately, the SEC under the Chairmanship of Godahewa also met Unit Trust Association and Margin Providers Association. Ahead of today’s Commissioners meeting, the SEC also had a discussion with CSE Chairman Krishan Balendra and CEO Surekha Sellahewa last week.

Industry expectations are that the SEC Commissioners will consider CSBA proposals that come under the direct purview of the capital market regulator very positively.

Since the new regime took office, there have been several discussions with various stakeholders to better understand the issues as well as prioritise actions.

Among key proposals submitted by the CSBA were revision in credit rule especially the formula for computing the net capital, revisit the temporary restrictions placed on trading of shares by broking firms executive directors, employees, their spouses and their nominees, ways to deal with settlement failures if any, use of CRIB data to assess credit worthiness of clients, assistance to improve front-end and back-office infrastructure of brokers, expedite demutulisation process of the CSE, a formal consultative mechanism and a task force to prepare a capital market development roadmap.

The SEC also requested the Unit Trust Association and the Margin Providers Association to submit their proposals in writing following their meetings.

Following the new regime at the SEC, the Colombo stock market has bounced back largely on improved sentiments among retailers, whilst institutional and high net worth investors have seized buying opportunities of select blue chips stocks whose prices had fallen to attractive levels.

The year-to-date negative dip has been reduced to 3% from a high of 22% in early June. However, the Bourse continues to struggle in terms of turning the All Share Index to positive, which has been elusive for two weeks now.