Govt extends SEC Chair Karunaratne’s tenure

By Nishel Fernando

The Government has extended the tenure of the existing Chairman of the Securities and Exchange Commission of Sri Lanka (SEC), Thilak Karunaratne, which expired last month, Government sources told Ceylon FT.
Parallel to Karunaratne’s extension, the Government is also set to re-appoint the entire SEC Board.

Government sources said the main reason for Karunaratne’s term extension was to allow the SEC to complete current investigations related to post-war large-scale Stock Exchange manipulations. The CSE has re-opened cases related to market manipulation which took place during the post-war period; however, no charges have been filed to date.
Karunaratne, who was reappointed in 2015, ended his current 3-year term on 25 January 2018.

The SEC Board includes D N R Siriwardena, Ranel T Wijesinha, S R Attygalle, Dilshani Gayathri Wijayawardana, Rajeev Amarasuriya, Suresh Shah, C J P Siriwardana and Jagath Perera.

Meanwhile, Parliament is preparing to approve the New Securities Exchange Bill, which was presented to Parliament last December. The new Bill aims to provide the required legal framework for the regulation and supervision of the capital market in particular, to deal with insider trading and market manipulation. The Bill will replace the outdated Securities and Exchange Commission of Sri Lanka Act No 36 of 1987. The Bill also includes special protection for whistleblowers and, in addition, has proposed a reward to any whistleblower who provides information leading to a successful enforcement action.

The new Bill has strengthened the legal mandate of SEC. According to the Bill, the new Commission will have ten members including the Chairman, with a majority of six members from the private sector. The Deputy Secretary to the Treasury, Deputy Governor of the Central Bank, a fellow member of the Institute of Chartered Accountants of Sri Lanka and the Registrar General of Companies will make up the remaining four members of the Commission.