Sri Lanka’s SEC says transparency of information is the key for development

thilak karunaratne SEC chairman Sri Lanka

July 27, 2015 (LBO) – Sri Lanka’s Securities Exchange Commission says that transparency enhancement leads to improve the performance of companies and enables businesses in becoming magnets for inward investment and more resilient in the face of future challenges.

“Markets move on information,” Thilak Karunaratne, Chairman, Securities & Exchange Commission of Sri Lanka said.

“The more forward looking and detailed information organizations provide, the more efficiently markets operate,”

“From a regulatory perspective, the SEC which embraces a disclosure based regime strives to inculcate a culture of corporate governance by ensuring that the market is fair, transparent and safe,”

“Hence, SEC’s overarching mandate is intended to promote full and timely disclosure of material information.”

He says a strong disclosure regime can help to attract capital and maintain confidence in the capital markets.

“By contrast, weak disclosure and non-transparent practices can contribute to unethical behaviour and to a loss of market integrity at great cost, not just to the company and its shareholders but also to the economy as a whole.” Karunaratne said.

He urged the organizations to distribute information for investors to make the right decisions.

Therefore, to further enhance auditor oversight the SEC is exploring the possibility of placing a legal audit duty on whistle blowing to report any irregular or improper conduct by the regulates , Karunaratne added.

“As this process is accepted by all the major audit firms I sincerely hope that their local associates will also fall in line,” he said.

“In pursuit of ensuring that markets are fair and transparent, we believe that there should be full, timely, and accurate disclosure of financial results and other information that is material to investor decisions,”

Today, stakeholders increasingly turn to a company’s management and shareholders, to ascertain whether their business practices take full account of the environmental social and governance (ESG) dimensions of its activities, and if its governance structure meets the expectations of society.

Therefore, Corporate Responsibility Reporting is an essential business management tool, Karunaratne said.

“Business transparency is increasingly demanded by market regulators as a means of enhancing the accountability of businesses to investors and broader stakeholders,”

“They play an increasingly pivotal role in recommending listed companies to disclose ESG information,”

“Such policies can be good for capital markets, for investors and companies which will be ultimately good for the society in general.”

Karunaratne says integrated corporate reporting has become a tool that is used to enhance the information of stakeholders and to ensure that these companies act as good corporate citizens.

“Therefore, it is imperative that we explore the possibility of encouraging listed companies to adopt ESG reporting on a voluntary basis.”

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7 years ago

First thngs first.SEC + all the stake holders needs to be transparent for a efficient, satisfactory operation.U are the helm of an organisatiom (of course for s hort period)that may need massive transformation itself.