Regulations needed to promote investor confidence - Heraymila CEO

Sanjeevi JAYASURIYA

It is important to observe the basic regulatory framework as market volatility is a risk for foreign investors and it will not be attractive, Heraymila Securities Limited Chief Executive Officer Ravi Abeysuriya said.

The stock market needs to achieve critical size and it should not be over regulated, he said at the 8th LBR - LBO CFO Forum held last week in Colombo.

“Reforms and developments are needed to take the Colombo Stock Exchange (CSE) to the next level. What is required is to promote investor confidence, ethical practices that instill public trust in the market. The market intermediaries serve the best interest of clients and robust regulatory standards will protect investors and advocate fair play,” Abeysuriya said.

The need of the hour is the visionary leadership to build our market.

There will be some policy changes shortly to ensure growth that include stipulating minimum public float as a continuous listing requirement for companies listed in the main board of the CSE to have more liquidity, amending the SEC Act to provide for civil sanctions such as punitive penalties and disgorgement on offenders such as those who artificially manipulate market prices, facilitate the growth of institutional investor base such as the Unit Trust industry and encourage more trading of debt through CSE, encourage full service brokers so that investors are able to diversify across all five asset classes and allow brokers to sweep credit balances to money market accounts and offer built-in cash management features.

There will be the introduction of paperless transactions and electronic confirmation with the CSE Board lot sizing being changed to one share and eliminate of odd lot board in the near future.

“We need to seize the opportunity to push the boundaries in realizing our vision. The potential is there and as collective corporate leaders we must map an ambitious path for the CSE to make it a goldmine for companies listed in the CSE as well as for the investors,” Abeysuriya said.