Business
SEC urges Compliance Officers to play a more effective role
As part of their continuing efforts to strengthen market standards and investor confidence, officials of the Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE) recently met with Compliance Officers of all categories of Market Intermediaries. The meeting served as a valuable opportunity to engage in a constructive dialogue on regulatory matters and industry best practices.
Emphasizing the importance of the compliance function, the SEC Chairman, Faizal Salieh, stated that the SEC regards the Compliance Officer as a Key Management Person who is empowered to act with independence, authority and responsibility. The appointment of a Compliance Officer is a prerequisite for granting or renewing licenses to Market Intermediaries and to comply with SEC requirements. Compliance Officers must provide a sworn affidavit declaring their adherence to the fit and proper criteria established by the SEC.
He further stated that, in the event the Compliance Officer resigns, it is imperative that the Market Intermediary must promptly inform the SEC, and select a successor with prior SEC approval. The Chairman stated that the SEC will investigate the reasons behind a resignation, particularly focusing on any internal interference or influences within the compliance function.
Referring to the regulatory obligations outlined in the SEC Rules applicable to Market Intermediaries, the SEC Chairman asserted that the SEC mandates that Compliance Officers must hold full-time positions due to the substantial responsibilities associated with their role.
Speaking on the reporting lines of the Compliance Officer, Salieh, emphasised that the compliance function should be independent of the business operations of the Market Intermediary and all compliance related matters should be reported by the Compliance Officer directly to the Board of Directors or a Board sub-committee dealing with risk, such as the Audit or Risk Committee.
The discussion also focused on the need for all Market Intermediaries to ensure compliance with the SEC Act and the applicable Rules. These Rules mandate the creation of an internal compliance manual for directors and employees, incorporating the specific content outlined in the relevant schedule to the Rules. It was stressed that before developing this manual, Market Intermediaries should have a Board-approved compliance policy to guide the Compliance Officer in implementing the compliance process. The Chairman urged Compliance Officers to ensure that there is a Board-approved compliance policy and discussed key areas within the minimum content of the compliance manual, including conflicts of interest, corporate governance, and risk management with a view to elevating market standards and making the market more attractive to investors.
The Chairman also stressed the need for Compliance Officers to provide prior written approval for all personal account trade transactions of other employees, in order that these transactions do not harm other clients’ interests. Referring to the complaints received by the SEC, the need to have an effective complaint handling mechanism at the Market Intermediary level to proactively address client complaints was also emphasized.
Speaking on the critical role Market Intermediaries play to protect the financial system and the wider community from criminal activities, Salieh stressed the importance of adhering to the regulatory framework set by the Financial Intelligence Unit of Sri Lanka (FIU) with regard to Anti-Money Laundering/Counter Financing of Terrorism (AML/CFT) regulations and Customer Due Diligence (CDD) requirements.
An International Monetary Fund (IMF) team led by Evan Papageorgiou visited Colombo from April 3 to 11, 2025. After constructive discussions in Colombo, Mr. Papageorgiou issued the following statement:
“Sri Lanka’s ambitious reform agenda supported by the IMF Extended Fund Facility (EFF) continues to deliver commendable outcomes. The post-crisis growth rebound of 5 percent in 2024 is impressive. Inflation declined considerably in recent quarters and has fallen to ‑2.6 percent at end-March 2025. Gross official reserves increased to US$6.5 billion at end-March 2025 with sizeable foreign exchange purchases by the central bank. Substantial fiscal reforms have strengthened public finances.
“The recent external shock and evolving developments are creating uncertainty for the Sri Lankan economy, which is still recovering from its own economic crisis. More time is needed to assess the impact of the global shock and how its implications for Sri Lanka can be addressed within the contours of its IMF-supported program.
“The government’s sustained commitment to program objectives is ensuring policy continuity and program implementation remains strong. Going forward, sustaining the reform momentum is critical to safeguard the hard-won gains of the program and put the economy on a path toward lasting macroeconomic stability and higher inclusive growth.
“Against increased global uncertainty, sustained revenue mobilization efforts and prudent budget execution in line with Budget 2025 are critical to preserve the limited fiscal space. Boosting tax compliance, including by reinstating an efficient and timely VAT refund mechanism, will help contribute to revenue gains without resorting to additional tax policy measures. Avoiding new tax exemptions will help reduce fiscal revenue leakages, corruption risks and build much needed fiscal buffers, including for social spending to support Sri Lanka’s most vulnerable. Restoring cost recovery in electricity pricing will help minimize fiscal risks arising from the electricity state-owned enterprise.
“The government has an important responsibility to protect the poor and vulnerable at this uncertain time. It is important to redouble efforts to improve targeting, adequacy, and coverage of social safety nets. Fiscal support needs to be well-targeted, time-bound, and within the existing budget envelope.
“While inflation remains low, continued monitoring is warranted to ensure sustained price stability and support macroeconomic stability. Against ongoing global uncertainty, it remains important to continue rebuilding external buffers through reserves accumulation.
“Discussions are ongoing, and the authorities are encouraged to continue to make progress on restoring cost-recovery electricity pricing, strengthening the tax exemptions framework, and other important structural reforms.
“The IMF team held meetings with His Excellency President and Finance Minister Anura Kumara Dissanayake, Honorable Prime Minister Dr. Harini Amarasuriya ; Honorable Labor Minister and Deputy Minister of Economic Development Prof. Anil Jayantha Fernando, Honorable Deputy Minister of Finance and Planning Dr. Harshana Suriyapperuma, Central Bank of Sri Lanka Governor Dr. P. Nandalal Weerasinghe, Secretary to the Treasury Mr. K M Mahinda Siriwardana, Senior Economic Advisor to the President Duminda Hulangamuwa, and other senior government and CBSL officials. The team also met with parliamentarians, representatives from the private sector, civil society organizations, and development partners.
“We would like to thank the authorities for the excellent collaboration during the mission. Discussions are continuing with the goal of reaching staff-level agreement in the near term to pave the way for the timely completion of the fourth review. We reaffirm our commitment to support Sri Lanka at this uncertain time.”
The Commercial Bank of Ceylon has transformed its iconic ‘Foreign Branch’ into the ‘Corporate Branch,’ reaffirming its commitment to delivering dedicated, comprehensive financial solutions to corporate and trade customers.
The Bank said this transformation represents a new milestone in its illustrious journey, and resonates with the rich commercial heritage of Colombo, a city that has long served as a vital trading hub in the region.
Strategically located at the Bank’s Head Office at Commercial House, 21, Sir Razeek Fareed Mawatha (Bristol Street), Colombo 1, this rebranded Corporate Branch stands as a first of its kind in Sri Lanka —a premier financial hub tailored exclusively to the needs of corporate customers, the Bank said. The transformation aligns with the Bank’s vision of providing unparalleled service excellence, bespoke financial solutions, and fostering long-term business partnerships.
Commenting on this strategic initiative, Commercial Bank’s Managing Director/CEO Sanath Manatunge stated: “It is our aspiration that just as the historic Delft Gateway, at which our Head Office is located, once opened the path to the Dutch Fort, our Corporate Branch will chart a new era of enduring and prosperous business collaborations, that will extend beyond Sri Lanka’s shores.”
Fits Retail has partnered with retail giant Abans PLC to showcase the iconic DeLonghi coffee machines at two of Colombo’s most prestigious locations: Abans Elite Colombo 3 and Abans Havelock City Mall showrooms.
At these dedicated demonstration zones, visitors can discover the unparalleled precision engineering and user-friendly technology that have made DeLonghi machines the preferred choice for discerning coffee lovers in more than 46 countries worldwide. Renowned for consistently delivering café-quality espresso, cappuccino, and even specialty cold brews, DeLonghi machines exemplify Italian innovation at its finest.
Yasas Kodituwakku, CEO of Fits Retail, expressed excitement about the collaboration: “This partnership represents our unwavering commitment to bringing global coffee excellence to Sri Lankan connoisseurs. With Abans PLC, we’re creating more than just demonstration spaces; we’re curating premium destinations for an authentic coffee experience.”
“As pioneers of premium lifestyle experiences in Sri Lanka, our collaboration with Fits Retail aligns seamlessly with our vision of elevating everyday moments into exceptional experiences,” said Tanaz Pestonjee, Director Business Development at Abans PLC.
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