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An overview of new Securities and Exchange Commission Act

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By Viraj Dayaratne PC
Chairman Securities and
Exchange Commission of Sri Lanka

Continued from yesterday

Prosecutorial Discretion of the Commission

Criminal proceedings

Consequent to the completion of investigations by the Commission, if the Commission is of the view that sufficient evidence exists to establish the commission of an offence under Part V, steps will be taken to institute criminal proceedings. Since criminal proceedings are to be instituted in the High Court and charges are filed in the form of an ‘indictment’ which can be presented only by the Attorney General as stated in the Code of Criminal Procedure Act (with the exception indicated in the Bribery Act), the Commission will refer the matter to the Attorney General for the filing of indictment and the prosecution will be conducted by the Attorney General. Even when charges were to be filed in the Magistrate’s Court in respect of all offences under the previous Act, the preparation of the charges and the conduct of the prosecution was by the Attorney General.

The offences other than what is contained in Part V are triable in the Magistrate’s Court.

Civil Proceedings

A new feature that has been introduced by the Act is the discretion conferred on the Commission to institute civil proceedings in the High Court exercising civil jurisdiction which is commonly referred to as the Commercial High Court in order to recover damages and to seek the imposition of a civil penalty. The Act has specifically conferred this jurisdiction on the Commercial High Court. Such proceedings can be instituted against a person who has committed a contravention under Part V. The decision of the Commission to institute such proceedings will depend on the ‘nature and manner of the contravention, the impact it has on the market and the extent of the loss caused to any investor’. The amount recoverable by the Commission will be three times the gross amount of the pecuniary gain made or loss avoided and the penalty the court can impose will not be less than ten million and not more than one hundred million rupees depending on the severity or gravity of the contravention. How damages so recovered will be distributed has also been stated.

The Commission has also been vested with the discretion to enter in to an agreement with any person with or without the admission of liability to pay an amount equivalent to three times the gross amount of the pecuniary gain made or loss avoided in respect of contraventions under Part V. Offences other than those enumerated under Part V can be compunded for a sum not exceeding one half of the maximum fine that can be imposed for such offence.

Administrative Sanctions

Another important feature that has been introduced is the ability of the Commission to impose ‘Administrative Sanctions’ on wrongdoers. Previously, the Commission was not expressly empowered to impose penalties or other administrative sanctions although all contraventions were considered as offences.

However, depending on ‘the nature and manner of the contravention, non compliance or breach and its impact’ this new provision leaves the Commission with the discretion (except in respect of offences under Part V) of imposing a variety of administrative sanctions such as a reprimand, penalty, restitution, imposing a moratorium on or prohibiting trading etc.

Steps to protect assets of investors and right to seek certain orders from court

Some of the other new features are the ability of the Commission to take certain steps to protect assets of investors, issue directives during the course of conducting investigations or inquiry known as ‘freezing orders’ (which are valid only for a period of seven days and thereafter to be confirmed by the Commercial High Court), power to apply to the Commercial High Court in situations of violations or imminent violations seeking certain orders such as a declaration that a securities transaction is void, directing a person to dispose of any securities etc.

Development of the Capital market

There are several provisions in the Act that will contribute towards the development of the market. The use of state of the art infrastructure such as the much needed Central Counterparty (CCP) has been recognized which will greatly minimize central counterparty risk and also enable the introduction of new products. The new law spells out the requisites for investing in derivatives (such as futures and options irrespective of the nature of the underlying asset), stock borrowing and lending, regulated short selling etc. This will enhance the liquidity levels in the market and take away the one sided potential that is presently available and help create a vibrant market. Long term investors will benefit from these opportunities.

The trading of unlisted securities is facilitated through a platform operated by a recognized market operator thus providing an additional trading platform. The ability for ‘market makers’ to operate as a market intermediary will ensure continued and efficient exchange of securities between buyers and sellers. This will provide depth to the market and also encourage the setting up of funds such as exchange traded funds.

Furthermore, the new law has redefined ‘securities’ to include an array of securities in keeping with new developments across the world. Similarly, there is also provision for ‘Collective Investment Schemes’ which go beyond Unit Trusts. As to what would come under this umbrella has been defined. These will provide new investment opportunities.

In line with expanding the product range that is currently available in the market, a category of persons have been recognized as ‘accredited investors’. Not only will this result in the protection of non-sophisticated investors, but will facilitate the issue of high risk instruments to the market which could be utilized by those who are in a position to take higher risks.

Provisions for the protection of whistleblowers have been included with the expectation that it will facilitate the curbing of market malpractices. Whilst it is important to ensure that this protection is not abused by making frivolous claims, the benefits such a system can bring forth should not be discounted.

Checks and Balances on powers and discretion of the Commission

The Commission has been vested with wider powers and discretion under the Act in order to ensure that it can perform its functions as a regulator in a more meaningful and effective manner. However it must be borne in mind that the Commission does not enjoy immunity and like any other public authority that has been vested with power and discretion, has to exercise such power and discretion according to law and will have to in all instances follow the rules of natural justice. It is relevant to note that the power and discretion vested in the Commission is circumscribed by several checks and balances that will ensure that the Commission will be held accountable and will not under any circumstance exceed its authority.

They take the form of provisions which mandates the commission to hear a party before it takes a decision against such party, affords a party a right of appeal, requires the Commission to give reasons for certain decisions as well as those that require the Commission to obtain orders from court and where the court is expected to afford a hearing to the affected party before making an order.

Further, the common law remedy of being able to challenge a decision of the Commission by way of a writ application in the Court of Appeal has been re-iterated in the Act thus statutorily fortifying the rights of an aggrieved party.

Conclusion

It is expected that the progressive provisions of the Act will make sure that all market participants have the confidence and the necessary environment to engage in their activities which is the ultimate goal of a capital market. The Commission as the regulator of the market at all times will be aware of the perils of over regulation and therefore be committed to striking the right balance. At the same time it must be emphasized that if all market participants practice self-regulation and act within the confines of the law, there will be no necessity for most of the provisions contained in the law to be made use of.

Concluded



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GS1 Lanka drives Sri Lanka’s shift to 2D barcodes

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GS1 Lanka marked its 10th Annual General Meeting with a focus on the next stage of product identification in Sri Lanka, as businesses prepare for the wider adoption of 2D barcodes and the growing demand for trusted product information.

Addressing the AGM, GS1 Lanka president Revan Fernando noted that GS1 has been giving Sri Lankan products a globally recognised identity for more than 30 years. He pointed to the shift from traditional barcodes to 2D barcodes as the next major step, particularly as consumers increasingly look beyond a product’s identity to information they can trust about its origin, ingredients, authenticity and use.

GS1 Sunrise 2027 is a global industry initiative aiming to transition retail checkout systems to read 2D barcodes such as QR codes and Data Matrix codes alongside traditional 1D UPC stripes by the end of 2027

Under its Sunrise 2027 initiative, GS1 Lanka is working with the retail and healthcare sectors to prepare businesses for the transition to 2D barcodes. Unlike a conventional barcode used at checkout, a GS1 QR code can also connect consumers to a wider range of product information and support traceability and product verification through GS1 standards.

Fernando also called on brands to get involved in the transition, noting that the change will require businesses to rethink how they use the limited space on product packaging and how they communicate with consumers. GS1 Lanka will also introduce a new retail information platform to help member brands provide richer product information and improve the presentation of their products to consumers.

GS1 Lanka CEO Alikie Perera said the organisation’s work is increasingly focused on helping Sri Lankan businesses keep pace with changes in global supply chains and consumer expectations. The next phase will place greater emphasis on 2D barcodes, GS1 Digital Link, traceability and digital product information, as businesses prepare for a more connected and information-rich marketplace.

At the local level, GS1 Lanka continued its awareness programmes for entrepreneurs, SMEs, manufacturers and exporters, covering product identification, barcode standards, traceability, supply chain efficiency and market access. The organisation has also seen growing adoption of GS1 Activate and Verified by GS1, with more than 5,500 member companies registered on the platforms and over 20,000 product records uploaded.

The AGM concluded with a recognition of the contribution of GS1 Lanka’s members, partners, Board and team, while setting the direction for the organisation’s continued work to bring global standards and new product identification technologies into wider use among Sri Lankan businesses.

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Sri Lanka must rethink plastics before waste crisis deepens, says OUSL Vice Chancellor

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Dignitaries at 3rd ICPIES

By Ifham Nizam

Sri Lanka’s plastic problem can no longer be treated simply as a waste-disposal issue, with the country facing mounting pressure on its coastal environment, fisheries, communities and public health, Vice Chancellor of The Open University of Sri Lanka Senior Professor P. M. C. Thilakerathne said.

The country must move beyond collecting and disposing of plastic waste and fundamentally rethink how plastics are designed, produced, consumed and recovered, Prof. Thilakerathne said, calling for a national shift towards a circular economy.

Addressing the 3rd International Conference on Plastics, Innovations and Environmental Sustainability, he said Sri Lanka’s experience, particularly the environmental fallout from the 2021 X-Press Pearl disaster, demonstrated why plastic pollution required urgent national attention.

The X-Press Pearl disaster resulted in large quantities of plastic pellets being released into Sri Lanka’s coastal waters, with impacts extending to marine biodiversity, fisheries and coastal livelihoods.

For an island nation whose economy and communities are closely connected to the sea, he said, plastic pollution could not be viewed as an environmental issue separate from national development.

” For Sri Lanka, these figures are not abstract,” Prof. Thilakerathne said, pointing to the global growth in plastic production and waste.

The world produces hundreds of millions of tonnes of plastics annually, while only a small proportion of plastic waste is recycled. A substantial amount ends up in landfills or is leaked, dumped or otherwise mismanaged.

The scale of the global problem has direct relevance to Sri Lanka, he said, because waste that is inadequately collected or managed can ultimately find its way into waterways and the ocean.

The Vice Chancellor said Sri Lanka therefore needed to strengthen not only waste collection and recycling but also the systems that determine what products enter the waste stream in the first place.

“Much of the waste problem is decided at the drawing board,” he said.

Products should be designed for reuse, recycling and disassembly, while businesses should be encouraged to adopt models based on refill, repair and reuse rather than continued dependence on single-use plastics.

He said Sri Lanka also had an opportunity to develop locally appropriate alternatives using renewable resources and agricultural residues.

The country’s coconut industry and other agricultural resources could support research into alternative materials, he said, but scientists must ensure that such substitutes were genuinely environmentally sustainable and did not simply shift the environmental burden elsewhere.

For Sri Lanka, the challenge is particularly important because plastic pollution intersects with several economic sectors.

Fishing communities depend directly on healthy marine ecosystems, while tourism depends heavily on the country’s beaches, coastal areas and natural environment.

Plastic pollution can therefore translate into economic and livelihood pressures in addition to its ecological consequences, Prof. Thilakerathne said.

He also warned that the problem extended beyond visible plastic waste.

Microplastics and nanoplastics have been detected in drinking water, food and air, while research into their potential effects on human health is continuing.

The longer-term public-health implications represented an important area for scientific research, he said.

Prof. Thilakerathne called for stronger cooperation between universities, government institutions, industry and local communities to develop solutions suited to Sri Lanka rather than relying solely on technologies or approaches developed elsewhere.

Universities, he said, had a responsibility to generate the evidence needed for national policy and to ensure that research reached the communities and industries expected to implement it.

This is where OUSL could make a particular contribution, given its nationwide network and large population of students, including working adults, teachers, professionals and learners from rural communities.

The university plans to strengthen environmental sustainability and circular-economy principles across its curriculum, expand professional education on waste management and sustainable materials, develop international research partnerships and improve sustainable practices within its own campuses and centres, he said.

Prof. Thilakerathne also called attention to the thousands of people who earn a living through informal waste collection and recycling.

Any national strategy, he said, must recognise the contribution of these workers and ensure that the transition towards a circular economy does not leave them economically vulnerable.

Sri Lanka has already introduced restrictions on a number of single-use plastic products, but the Vice Chancellor said regulations must be accompanied by enforcement, investment in recovery infrastructure, industry participation and changes in consumer behaviour.

At the international level, he said, Sri Lanka also needed to contribute actively to efforts to address plastic pollution, backed by credible national scientific research.

The global nature of the plastics trade and pollution meant that action by individual countries alone would not be sufficient.

The conference therefore provided an opportunity for Sri Lankan researchers to connect local environmental challenges with international research and technological developments, he said.

Addressing young researchers and students, Prof. Thilakerathne urged them to measure the value of their work not only by academic publications but also by its ability to produce practical change.

He encouraged researchers to work across disciplines, engage with policymakers and industry, and remain connected to communities affected by the problems they study.

“The most meaningful research is that which changes practice,” he said.

He said Sri Lanka’s plastic crisis ultimately required a change in the country’s approach to materials, consumption and waste.

“Our task is not to abandon the material that shaped the modern world but to make it compatible with the sustainable one,” Prof. Thilakerathne said.

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The internationally acclaimed play ‘Every Brilliant Thing’ comes to Sri Lanka

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Theruni Indrapala

Prepare for a theatrical experience that brings people together and celebrates life. The Peterite Arts Foundation, in proud association with World Vision Lanka, announces the showing of an amateur production arranged with Casarotto Ramsay & Associates Ltd. Every Brilliant Thing, the acclaimed solo play by Duncan Macmillan and Jonny Donahoe. Directed by Theruni Indrapala, the play’s lead is played by former Peterite Mario de Soyza. This uplifting, interactive production will run at Kamatha Studio, BMICH, Colombo, from 05 to 08 November 2026.

Every Brilliant Thing tells a deeply moving yet joyful story. At seven, the narrator begins listing everything worth living for, from ‘ice cream’ and ‘things with stripes’ to ‘rollercoasters’, hoping to help his mother through depression. Over time, the list grows to more than a million entries and becomes a lifelong source of comfort for the narrator.

What began as a short monologue in 2006 has grown into a global phenomenon, performed in more than 80 countries across five continents. Its hopeful message has reached audiences in extraordinary settings, including aboard the USS George H.W. Bush aircraft carrier. The play has also been translated into 44 languages, including Arabic and Greek, with a special Chinese adaptation titled Every Brilliant Little Thing.

The play’s need for emotional intelligence, openness and a strong connection with the audience attracted a distinguished line-up of performers. Following a successful West End run featuring Sue Perkins and Minnie Driver, the play made its Broadway debut at the Hudson Theatre, where it ran from 21 February to 9 August 2026. Tony Award winner Daniel Radcliffe opened the Broadway production, receiving critical acclaim and a Tony nomination for Best Lead Actor in a Play. Law & Order: SVU icon Mariska Hargitay then made her official Broadway debut in the role, followed by Golden Globe winner Tracee Ellis Ross, who closed the run.

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