Oct 31, Colombo: The Colombo Stock Brokers' Association (CSBA) has welcomed the changes made by the Securities and Exchange Commission (SEC) to boost the Colombo Stock Exchange (CSE).
The CSBA has stated that the formula of computing credit and pledging to promote the country's capital markets to local and international investors would help regain investor confidence in the CSE.
"We wish to place on record that the new SEC Chairman and commission members reviewed our requests within a very reasonable time and were quick to understand and implement some of the urgent needs of the moment e.g. computation of net capital. We specially appreciate the timely action taken by the Chairman and the commission members since on many occasions we brought this anomaly to the attention of the authorities to which there was no tangible response," the CSBA has said.
The former SEC Chief Tilak Karunaratne who was pushing for tougher market regulations resigned in August due to pressure from the stock brokers to resign.
The stockbrokers have complained that tougher market regulations imposed by the SEC is the reason for the dwindling performance of the Colombo Stock Exchange.
The SEC under the new Chairman Nalaka Godahewa relaxed the rules earlier this month on broker credit and lifted the restrictions imposed on short-term trading by directors and workers of stockbroking firms.
The CSBA has also pointed out that the net capital calculation formula had resulted in continuous selling which kept the market depressed and inhibited the attraction of retail players to the market.
"In our view retail players are vital to create a sustainable market and our suggestion was well received by the Chairman and commission members. We equally appreciate some of the changes made that were not part of our requests. As an association we fully endorse the view that recent changes will go a long way to rekindle the market in the short run and create liquidity in the long run and thereby sustain a vibrant market in the future," the Association said.