Friday Jun 19, 2026
Friday Jun 19, 2026
Friday, 19 June 2026 00:25 - - {{hitsCtrl.values.hits}}
The Securities and Exchange Commission of Sri Lanka (SEC) has in 2025 stepped up enforcements under powers granted by the SEC Act, No. 19 of 2021, including a largest-ever settlement agreement worth Rs. 188.1 million from an investor for false trading and market-rigging transactions.
According to the SEC’s 2025 Annual Report, the settlement was reached under Section 152 of the Act following a contravention of Section 128(1), relating to conduct constituting an offence under Section 147(1).
The Commission described the Rs. 188.1 million payment as the highest amount agreed under a settlement arrangement since the introduction of settlements for offences under Part V of the SEC Act.
The record settlement was part of a broader enforcement drive during 2025, with the SEC securing at least Rs. 207.4 million through settlements, administrative penalties, and compounding payments, excluding the value of a separate insider-dealing settlement for which the amount was not disclosed.
Among other enforcement actions, the SEC imposed administrative penalties of Rs. 5 million each on two corporate finance advisers licenced by the Commission for violating Rule 33(b) of the SEC Rules applicable to corporate finance advisers. The violations constituted offences under Section 175(1)(a) of the SEC Act and were punishable under Section 175(3).
A listed public company was also fined Rs. 6 million for committing an offence under Section 88 of the SEC Act.
In addition, an offence relating to a violation of Rule 12 of the SEC Rules 2001 was compounded upon application by an individual for Rs. 3.3 million under the provisions of the former SEC Act, No. 36 of 1987.
The SEC further disclosed that it entered into a settlement agreement with two individuals for insider dealing and procuring another person to trade in violation of Sections 137(2)(a) and 137(2)(b) of the Act, although the value of the settlement was not disclosed.
The latest enforcement outcomes signal a shift towards more consequential regulatory action under the 2021 legislation, which expanded the Commission’s powers to impose administrative sanctions and enter into settlement agreements for market misconduct.
The SEC said it continued to strengthen surveillance and enforcement efforts to deter market abuse and enhance investor confidence in the capital market.
During 2025, the Commission commenced 10 new investigations and inquiries and directed the Secretariat to undertake investigations, preliminary investigations, or further investigations into 12 additional matters arising from surveillance referrals and ongoing inquiries.
Together with 26 investigations carried forward from the previous year, the SEC handled a total of 48 investigations during 2025. Of these, seven investigations were concluded with enforcement action, while the remainder continued at various stages of inquiry.
The number of investigations handled during the year was lower than the 62 investigations overseen in 2024. However, the latest Annual Report points to a greater emphasis on enforcement outcomes, with the regulator securing its largest-ever settlement and imposing a series of financial penalties for market misconduct and regulatory breaches.
