Sri Lankan private pension funds encouraged to enter equities: SEC chairman

Apr 02, 2010 (LBO) – Pensions funds operated by private firms would be encouraged to invest more in the stock market and legal hurdles that prevented them would be cleared, Sri Lanka’s capital market regulator said. Sri Lanka state managed EPF has been investing heavily in the equity market in recent weeks as long-standing foreign investors pulled out.

“Currently there are 172 private provident funds that hold 210 billion rupees in assets have invested almost entirely on government paper,” Udayasri Kariyawasam, chairman of the Securities and Exchange Commission said.

“We want them to invest in equities in future; there are some regulatory bottlenecks that need to be cleared to do so.”

Before the creation of Sri Lanka’s state-managed compulsory Employees Provident Fund, many private older private firms had their own pension funds. They mostly invest in government paper.

“We have already spoken to some of the funds and they are very happy invest in the market,” Kariyawasam said.

Employees in some private firms like John Keells Holdings, Hayleys and, Richard Pieris contribute to a private pension fund managed by the company, or by a fund management company.