SEC, CSE enlighten listed companies on new Securities and Exchange Commission Act

The Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE) organised a symposium on 6th December 2021 to enlighten senior officials of listed companies on the features of the new Securities and Exchange Commission Act No. 19 of 2021.

SEC Chairman Viraj Dayaratne PC delivered the keynote address with a presentation featuring the salient aspects of the new SEC Act particularly in relation to listed public companies. He focused on Part III of the Act which particularly deals with ‘Issue of Securities’ and elaborated on the duties and obligations of listed public companies. It was stated that provisions with regards to the public offer of securities had been introduced to ensure accountability of funds solicited from the public. Speaking further on issue of securities, he spoke about the ability of the Commission to issue stop orders preventing an issuer from allotting, issuing, offering or making an invitation to subscribe or purchase or sell further securities relating to public offers in situations where the Prospectus contains a statement or information that is false or misleading. Another change that has been introduced was the expansion of the interpretation to the term ‘relation’ to include step children, step brother and step sister that becomes applicable in situations where securities are gifted.

The Chairman went on to brief the audience on obligations pertaining to public disclosures to be made by listed public companies and highlighted the requirement for Directors of such companies to comply with fit and proper criteria specified by the Commission by way of its rules or the rules of an Exchange approved by the Commission. In addition, he also touched on the specific duties of an auditor of a listed public company.

In his keynote delivery Dayaratne also spoke about the main market offences and in particular Insider Trading and the criminal as well as civil proceedings that can be instituted. The various checks and balances on the powers and discretion of the Commission were also discussed. In conclusion, the Chairman emphasized that the companies need to embrace good corporate governance practices and thereby protect the interests of investors and ultimately to maintain a level playing field and ensure confidence in our capital market. He also noted that if companies function with self regulation and act in compliance with the law, most provisions contained in the new SEC Act will have little bearing.

The Keynote address was followed by a lively panel discussion moderated by Rajeeva Bandaranaike, CEO -CSE where Manil Jayesinghe, Commission Member, SEC, Chinthaka Mendis, Director General, SEC, Dumith Fernando, Chairman CSE, Renuke Wijayawardhane, Chief Regulatory Officer, CSE, Krishan Balendra, Chairman, JKH PLC, Dr. Hans Wijayasuriya, CEO,-Telecommunications Axiata Group, Dr. Harsha Cabral PC, Chairman Tokyo Cement PLC, Asite Talwatte, Chairman –Integrated Reporting Council, Faizal Salieh, Chairman, Sri Lanka Institute of Directors and Dr. Harshana Suriyapperuma, Director –SEC SL shared their perspectives on the new SEC Act.