Interview: Three cases reopened, investigation division to expand in Nov, says SEC Chairman

Thilak Karunaratne

Nov 02, 2015 (LBO) – The Securities and Exchange Commission of Sri Lanka has reopened three cases as part of probes that will be carried out by an expanded investigations and enforcement division, the SEC Chairman said.

An SEC reorganization will be completed in November, and an upgraded surveillance system will be in place next year, SEC Chairman Thilak Karunaratne told Lanka Business Online.

“When the new commission took over I impressed upon them the need to revisit these cases,” he said.

After building a case for the commission on why they should be reconsidered, three cases from 2010-2012 period have been reopened, Karunaratne said. Three more are on their radar, he added.

A former Kalutara district parliamentarian, Karunaratne was first appointed to lead the SEC in December 2011 but he later resigned accusing the government of interference in 17 ongoing cases.

He resumed his role as chairman in January this year, and has taken an honorary position accepting no SEC perks.

A reorganization of the SEC, which has a staff of 80, will be completed this month to address a manpower shortage in the investigations division, he said.

“An investigation officer is a skilled job, I have asked the IGP, even the FCID and CID for trained operatives at least on a short term basis,” Karunaratne said.

“By mid November things will be in place. By then we will have a fully active investigation division going into all these matters.”

The SEC, which regulates Sri Lanka’s capital market, is in the process of revising the SEC Act which will have more powers for civil and administrative sanctions, support the setting up of a clearing house for settlement of securities, and demutualization of the Colombo Stock Exchange.

“We are looking at a completely new act,” he said.

A committee, chaired by K. Kanag-Isvaran, an architect of the Companies Act of 2007, and other advisors plan to complete the drafting of the SEC Act this month, he said.

The target for passing the new act into law, however, is end 2016, as there are several more steps such as preparation by the legal draftsman, translations, cabinet approval and parliamentary approval, Karunaratne added.

Demutualization of the Colombo Stock Exchange will be possible under the new Act. Sri Lanka currently trails behind regional peers such as India, Bangladesh and Pakistan who have demutualized their stock exchanges away from ownership by stock broking firms in recent years.