Feb 19, 2017

Strong criticism against proposed new act for SEC! Featured

There is no scientific basis or any adherence to international standards observed in a draft document that has been prepared to replace the Sri Lanka Securities and Exchange Commission Act, financial market sources say.

The SEC has invited suggestions and views regarding the document after posting it on its website in the English language only, in a breach of the state language policy.

According to the document, there is likelihood that a set of professional qualifications will be introduced for the chief executive and director board members of listed companies.

The source say such a proposal is wholly inappropriate for a developing share market like ours.

Also, it is unclear as to what will happen to a majority of CEOs and director board members of the leading listed companies.

The draft proposal also changes the composition of SEC’s members, bringing it down from the current 10 to nine, with the removal of the chairman of the Institute of Chartered Accountants, the sources add.

Share market analysts say the proposed removal will be a disrespect to the position as well.

Furthermore, the subject minister will be denied the right to appoint the SEC’s director general.

Analysts add that rather than a document that suits the local requirements, it appears to be one prepared by taking pieces out of similar acts in Malaysia, Singapore, Pakistan and other countries.

They note that in view of the global trends, the shortcomings in the act should be rectified in scientifically.