Business
SEC overhauls Regulations Governing Market Institutions, Market Intermediaries and introduces a Code for Collective Investment Schemes
The Securities and Exchange Commission of Sri Lanka (SEC), the securities market regulator has prepared Rules pertaining to Market Institutions, Market Intermediaries and a Code for Collective Investment Schemes following the enactment of the new Securities and Exchange Commission Act No. 19 of 2021. These Rules which were made in terms of the powers vested in the Commission under Section 183 of the Act. The Rules in respect of Market Institutions and Market Intermediaries were published in the Gazette Extraordinary bearing Number 2271/09 and 2271/10 dated 15 March 2022 whilst the Rules in respect of Collective Investment Schemes which will be known as the “CIS Code” was published in the Gazette Extraordinary bearing Number 2278/2 and dated 07 May 2022. They come in to force from the date of the respective Gazette Notices.
The key components of the Rules for the three Market Institutions, namely an Exchange, a Central Depository and a Clearing House, include the licensing procedure, minimum financial requirements, reporting and infrastructure requirements, governance structures, compliance and internal controls etc. In addition, these Rules embody detailed criteria for fitness and propriety of key management persons of market Institutions and has introduced the important role of a compliance officer whose responsibility is to ensure that the Market Institution at all times complies with applicable laws, rules and regulations and submits a compliance report to the Commission periodically.
The new SEC Act has redefined “Market Intermediaries” and has included a range of new Market Intermediaries such as corporate finance advisors, derivatives brokers, derivatives dealers and market makers. The newly gazetted Rules pertain to eight Market Intermediaries. They are Investment Managers, Margin Providers, Credit Rating Agencies, Underwriters, Stock Brokers, Stock Dealers, Managing Companies and Corporate Finance Advisors. They cover the licensing procedure, minimum financial and infrastructure requirements, qualifications and experience required for persons dealing with clients, maintenance of books and records, ceasing of operations etc. Rules in respect of market makers are being prepared with the assistance of experts from the Asian Development Bank and Rules in respect of derivative brokers and dealers will be published when derivatives are to be introduced.
Similar to the provisions contained in the Rules for Market Institutions, the Rules for Market Intermediaries require them to have a compliance officer whose duties have been clearly spelt out. The key management persons are required to submit an affidavit at the time of their appointment and at the time of renewal of the license affirming compliance with the criteria stipulated for fitness and propriety.
The new SEC Act contains specific provisions for the setting up of Collective Investment Schemes (CIS) which go beyond the presently available Unit Trusts and paves the way for the introduction of Interval Funds, Exchange Traded Funds, Money Market Schemes, Umbrella Schemes, Real Estate Investment Trusts and Hedge Funds to name a few. Section 183 of the new SEC Act defines what Collective Investment Schemes are. The detailed definition makes it clear as to what type of scheme or arrangement will be considered a Collective Investment Scheme and also explains what type of pools of funds are not included within it.
The Collective Investment Scheme Code of 2022 (the “CIS Code”) which has now been brought into force repeals and replaces the Unit Trust Code which was introduced in 2011. The CIS Code will thus provide for the creation of numerous types of collective investment schemes involving different asset classes including equity securities and fixed income securities to Real Estate, Gold, Derivatives etc. Unit Trusts will also come within this fold. They will cater to investors with diverse risk appetites. It will be possible to set up Hedge Funds although they are possible of being marketed only to Accredited Investors. The issue of high – risk instruments to the market is thereby facilitated whilst at the same time ensuring the protection of non-sophisticated investors.
The CIS Code spells out the manner of appointment and replacement of a Managing Company, its duties and functions, the manner of appointment and replacement of a Trustee and a Custodian of a scheme, their duties and functions and connected matters. It spells out in detail the types of schemes that can be set up, general conditions to be followed in their operation and marketing, general conditions for initial offers and sale and purchase of units, creation, issue, repurchase and redemption of units, sale and redemption of units in open ended and interval schemes, account keeping and reporting requirements, suspension of dealing and termination of schemes, termination or winding up of a scheme etc. The CIS Code enables the outsourcing of certain administrative functions of a Managing Company, enabling them to focus more on their core activity of investment management. It also has provisions relating to the role of an Auditor of a scheme and the co-operation that is required to be extended to an Auditor. The Annexures sets out minimum contents of a Trust Deed and the Key Investor Information Document as well as guidance on asset valuation and pricing, guidance on conflict of interest and guidance on complaints handling.
The Chairman of the SEC Viraj Dayaratne PC commenting on the publication of the Rules said “With the coming into force of the new Act, it was necessary for us to ensure that steps are taken to give effect to the provisions contained therein and have the mechanisms in place for its proper administration. We are happy that we have been able to compile them within a relatively short period of time”. He went on to observe that “We are optimistic that these Rules will foster good business conduct and a good corporate culture among all regulated entities and provide for the fair and efficient treatment of their clients and also promote confidence in the capital market. As the Market Intermediaries are directly in contact with investors, supervision of their functions by the SEC is an important function towards preventing possible misconduct and in promoting ethical behavior. This will in turn lead to the creation of a fair and orderly market thus instilling the much needed investor confidence”.
. Chinthaka Mendis, Director General of the SEC stated, “The Rules, which were finalized after several rounds of stakeholder consultations, spell out a clear framework for the operation and governance of these entities which play a pivotal role in the Capital Market. The Rules require these entities which are regulated by the SEC, to conduct themselves in a manner that will ensure the protection of the interests of their clients and preserve the integrity of the Securities Market. Compliance with these Rules is seen as an essential foundation for the maintenance of a fair and orderly market as well as to ensure investor protection”.
The Rules and the CIS Code can be accessed through the SEC Website www.sec.gov.lk.
The SEC has also finalized Guidelines to provide for the duties and obligations of ‘Supplementary Service Providers’ in terms of Section 169(3) of the Act. In terms of the definition found in Section 183, those who come within this definition are actuaries, auditors, custodians, trustees and valuers. These guidelines will be published on the Website of the SEC.
Business
Samata Kotasak, Samata Ekakayak forums draw large crowds in Anuradhapura & Jaffna
The Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE) have taken their ‘A Share for Everyone, A Unit for Everyone’ (Samata Kotasak, Samata Ekakayak) initiative to Anuradhapura and Jaffna through investor forums last week, as part of an ongoing islandwide effort to broaden investor participation. The forums were held on 10th September at the Golden Mango in Anuradhapura, and on 12th September at the Tilko Jaffna City Hotel. The forums attracted over 600 participants across both locations.
The “A Share for Everyone, A Unit for Everyone” concept, developed by the Chairman of the SEC, Sen. Prof. D.B.P.H. Dissabandara and launched in July of this year, aims to promote a shared commitment to creating wealth and value within a fair, efficient, orderly, and transparent capital market by ensuring broad and accessible participation for all.
As part of this initiative, the SEC and CSE will continue to host investor forums across the country to strengthen investor education and awareness while promoting broader participation in the capital market beyond the Western Province. By leveraging the CSE’s nationwide reach and the growing interest in equity investments, the programme will provide investors with greater access to Sri Lanka’s capital market through stockbroking firms and unit trust management companies.
“Traditionally, Sri Lankan investors have favoured conventional investment avenues, but it has yielded comparatively fewer returns than the capital market,” remarked Executive Vice President – Marketing, CSE, Niroshan Wijesundera, speaking on the Unit Trust and Stockbrokering firm outreach objectives of the broad-basing initiative.
“Over the medium to long term, capital markets have given higher returns. By setting aside small allocations to invest regularly through professionally managed vehicles such as unit trusts, first-time investors can participate in the capital market, receive higher returns in the medium-to-long-term, and gain experience and confidence. On the other hand, those with experience and knowledge can directly engage with the capital market through a stockbrokering firm. Traditional investments are liable to be taxed, whereas investments in the capital market are capital-gains tax free.”
Speaking on the favourable investment climate, he noted that the Sri Lankan capital market is at a relatively low Price-to-Earnings (P/E) ratio of 11.03x in a global context. “As covered in the presentations at the forums, the Sri Lankan capital market has demonstrated comparative resilience in the face of global market corrections, such as the Middle Eastern crisis. Sri Lanka has withstood bigger shocks, such as past crises, the war, COVID-19, the economic downturn, and the fuel crisis.’’
Business
“Pulle Madu” to medical school: record intake signals turning point for plantation sector welfare
Many generations ago, an estate child’s first years began in a cloth hammock strung up near the rows of tea bushes, so a mother could keep working within earshot of her infant. Later a corner in a line room was converted to establish Pulle Madu, where infants and toddlers were sheltered to ensure that plucking by their mothers was not disrupted.
Today, fully equipped Child Development Centers (CDC’s) complete with qualified and trained CDC officers have replaced the old Pulle Madu, to offer children the same level of education and exposure that any child in a city avails. These children receive custodial care, and child development support through these CDC’s, while Early Childhood Centers (ECD) lay greater emphasis on structured early learning through a play-based curriculum, while also providing dedicated spaces for working mothers to breastfeed.
These Centers are the result of the collaborative efforts of the Regional Plantation Companies (RPCs), the Government of Sri Lanka, and key plantation-sector trade unions, including the Planters’ Association of Ceylon. Together, these stakeholders form the tripartite body that established the Planters’ Human Development Trust (PHDT) in 1992, and have since contributed to significant development across the 22 RPCs.
The RPCs collectively spend nearly Rs. 720 million annually to maintain these CDC’s, reflecting the sector’s continued investment in childhood development and the wellbeing of plantation communities. This foundation supports their continued education and health development and, in the long term, helps them progress towards successfully completing the GCE O/L and A/L examinations.
To date, primary school enrolment among children from plantation communities has reached 100%, while approximately 2–3% of students go on to pursue higher education at local universities. Over the past two years, nearly 250 children from plantation families have gained admission to university, marking the highest number recorded by the sector to date. Among them is a young man from Strathspey Estate, now training to be a doctor at Eastern University. “Everything I have achieved is a direct result of my parents’ tireless hard work,” he said, thanking his teachers and the scholarship grant that carried him through school, whose identity is withheld in line with the programme’s standard practice for student privacy.
It also manifests powerfully in Roots to Wings, the university start-up scholarship initiative launched by PHDT in collaboration with the Planters’ Association and other industry partners. “Every year we saw bright students earn a place at university and then risk losing it, not for lack of ability, but because they couldn’t afford a laptop, a set of books, or even proper clothing to arrive on campus with dignity,” explained PHDT Director General Lal Perera. “To correct this situation, after careful study, we facilitated a scheme that bridges the most urgent gap. We cover the immediate start-up costs, while the Regional Plantation Companies, through their CEOs, ensure that the student is carried through to graduation. If a family loses estate housing when a parent retires, we don’t let that end a degree either. Students are granted extensions, and where needed, RPCs provide new housing, supported in part by Indian High Commission grants. Once a child has earned a place at university, we consider it our duty to make sure that place is never lost to circumstance.”
This scheme has become more than financial assistance; it is a lifeline of dignity, continuity, and hope. By addressing the hidden barriers that often derail promising futures, Roots to Wings ensures that talent from the plantation sector is not wasted but nurtured into leadership for tomorrow. It is a model of shared responsibility, where industry stakeholders collectively safeguard the aspirations of youth, transforming vulnerability into opportunity and circumstance into achievement.
The scheme costs an estimated LKR 10 to 15 million a year, funded by various industry stakeholders. The 2024 to 2025 cohort spans 35 Arts students, 22 in Commerce and Management, 13 in Drama and Theatre, 10 in Bio-systems, 7 in Music, 6 in ICT, four each in Medicine and Engineering, three in Engineering Technology, two in Law and 24 across other faculties, a spread once unimaginable on estates where literacy in PHDT’s target areas has climbed from 40 to 84 percent. Specialised degree pathways and vocational opportunities such as Uva Wellassa University’s Bachelor of Science Honours in Plantation Management, vocational training through the National Institute of Business Management and digital learning through the Open University of Sri Lanka has further empowered students with promising academic and career prospects.
The health figures tracked alongside the Department of Census and Statistics and the Family Health Bureau since 1992, shows infant mortality falling from 18.3 per 1,000 live births to 4.65, and under five mortality from 42.6 to 6.26. Maternal mortality, once as high as 150 per 100,000 live births, has fallen close to zero in most recent figures, and stillbirths have dropped from 40 per 1,000 deliveries to under five today. Nearly all deliveries now happen in health institutions, almost every mother receives antenatal care, and every child completes first year immunization, which are gains attributed to better roads, housing, welfare services and preventive healthcare across the estates.
Nutrition support has similarly evolved, with centers moving from contractor-supplied meal packets towards parent-prepared midday meals. A centrally managed kitchen model has also been piloted at Dessford Estate, with a second facility planned at Holyrood Estate. However, officials do acknowledge that nutrition among younger children remains the area needing the most continued investment.
The progress made in improving health outcomes, particularly in reducing infant mortality, is significant. This reflects the RPCs’ continued commitment to community development, which extends to supporting education through scholarship programmes. These initiatives, together with established healthcare and educational support systems, contribute to improving opportunities and outcomes for children and families across plantation communities.
Business
Ceylinco Life dominates NAFLIA 2026 winning 12 top honours, including 5 National Awards
Ceylinco Life has reaffirmed its standing as a powerhouse of sales excellence in Sri Lanka’s life insurance industry, securing an outstanding 12 awards at the 2026 edition of the National Forum for Life Insurance Advisors (NAFLIA), including five National Awards that recognised its professionals as the best in the country.
The awards event saw Ceylinco Life’s sales professionals excel at both the Large Company and National levels, with the company claiming top honours across the Advisor, Supervisor and Branch Manager categories in both levels, while also producing two winners in the Large Company level in the Fast Starter Advisor category.
In the Advisor category, A. P. S. Wijayakumar secured first place at National and Large Company Level, while A. I. P. Manjula was placed second in both levels, giving Ceylinco Life four awards across the two tiers of recognition in this category.
-
News6 days agoGnanasara Thero absconding after SC ruling
-
Opinion5 days agoFrom Galkissa (Mount Lavinia) to Tambuttegama
-
Business6 days agoHNB Finance strengthens Board with four independent directors
-
News2 days agoUS embassy won’t comment on IGP’s probe into joint drug raid
-
Sports6 days agoCulture within cricket team worrying authorities
-
Features5 days agoSri Lanka’s university crisis: Brain drain and union action demand urgent reform
-
Features4 days agoThe emptying university: why are academics leaving?
-
News6 days agoHouse to debate 22A, Judicature Bill next week
