Chandra J calls for safeguarding of EPF members’ investor rights

7 June 2016

Registered Post

Minister W. D. J. Seneviratna,

Minister of Labour & Trade Union Relations,

Ministry of Labour & Trade Union Relations,

Labour Secretariat,

Colombo 5. 

Dear Mr. Minister,

Safeguarding the Investor Rights of Employees Provident Fund (EPF) Members

I write with further reference to my letter of 3 June, where it was stressed that the Trustee responsibility and overall oversight responsibility of the pool of investments held in Trust for the members of the EPF by the Central Bank of Sri Lanka, lies with you, the Ministry of Labour and Trade Union Relations, as well as the Commissioner of Labour and Superintendent of the Employees Provident Fund.

I this context, I wish to draw the kind attention of yourself and those copied in this letter, to the Statement of Investor Rights developed by the Chartered Financial Analysts Institute and endorsed by the Securities and Exchange Commission of Sri Lanka.

In the due discharge of the aforesaid Trustee responsibility and overall oversight responsibility, it is incumbent upon you, the Ministry of Labour and Trade Union Relations, as well as the Commissioner of Labour and Superintendent of the Employees Provident Fund to demand from the Central Bank, as the Fund Manager and Administrator of the Fund Assets, that all independent financial services providers engaged by them in the investment of funds of the EPF, do adopt and conform to fundamental ethical principles, including those set out in the Investor Rights Statement, especially the under noted commitments as highlighted;

1.Honesty, competence, ethical conduct and compliance with the law

2.Independence and objectivity

3.Placing the interests of the EPF members as a priority, in preference over those of the entity 

4.Fair treatment

5.Disclosure of any existing or potential conflicts of interests

6.Understanding the circumstances of the EPF members

7.Clear, accurate complete and timely communications

8.Explanation of fees and costs charged

9.Confidentiality

10.Complete recording in support of work done

This explicit undertaking must be secured by you from the Central Bank and EPF Officials engaged in providing services in the investment and management of the pool of funds, as well as other financial services intermediaries retained by the Central Bank and/or the Employees Provident (including but not limited to Primary Dealers engaged in facilitating investment of EPF funds) in that connection, in order that they all continue to retain the confidence and trust of the Employees Provident Fund Members.

I remain confident that this appeal made to you, in the interest of upholding transparency and good governance and duly delivering on the aforesaid Trustee responsibility and overall oversight responsibility owed to nearly 2.5 million members of the EPF, will receive your immediate careful consideration.

Yours sincerely,

Chandra Jayaratne

cc.  President

       Prime Minister

       Secretary Finance,

       Secretary Ministry of Labour & 

       Trade Union Relations

       Governor Central Bank

       Commissioner of Labour,

       Superintendent of EPF

       Media for Publication