New SEC chief calls on capital market stakeholders to embrace self-governance

From left : SEC Director General Chinthaka Mendis and Chairman  Faizal Salieh

• Stresses need to move away from short-termism 
• While SEC has more teeth under new Act, says it is mindful in playing a balanced regulatory role
• Highlights the importance of developing in-house research capabilities for brokers

The newly appointed chief of capital market regulator, the Securities and Exchange Commission (SEC) called on stakeholders to embrace “self-governance” so that the public interest is safeguarded and upheld.
SEC Chairman Faizal Salieh urged stakeholders of the capital market to move away from short-termism and move towards long-term sustainability collectively to improve investor trust and confidence.

“Our capital market must become a good alternative source for capital funds, like in other jurisdictions, and we are being watched by overseas and local investors on how the market behaves and is regulated,” said Salieh when he met with representatives of the stock broking industry recently.

He noted that while the SEC has more teeth under the new Act, it is mindful in playing a balanced regulatory role with due consideration to both market development and market facilitation.

Therefore, he emphasised the need to safeguard investors while helping the market grow by “doing the right thing the right way”. 
“The stock brokers are the front liners in the market who engage with clients directly and therefore should act with due responsibility in advising clients and trading on the Exchange,” said Salieh.

Further, the stockbrokers were also urged to develop in-house research capabilities, which is now a requirement under the new SEC Act, review risk mitigation policies and processes, ensure succession planning and strengthen the compliance function.
The SEC head suggested that a Compliance Officers Forum be created to enable an exchange of views, and best practices and improve compliance in the market.

The meeting also provided participants room to share ideas and suggestions to develop the capital market. Some of the areas that were discussed include; the listing of identified State Owned Enterprises (SOE), the attraction of captive funds such as pension and retirement funds to the market, and the listing of Green and Blue bonds, and Infrastructure Bonds.
Present at the meeting were also SEC Director General Chinthaka Mendis, Colombo Stock Exchange (CSE) Chairman Dilshan Wirasekara, Chief Executive Officer Rajeeva Bandaranaike and other officials of both the SEC and CSE.