SEC lifts sales ban on brokers, relaxes credit restrictions

Sri Lanka’s Securities and Exchange Commission (SEC), under its new chairman Nalaka Godahewa, on Monday overturned rules enforced by the previous regime, lifting credit restrictions and removing a time-bound ban on brokers selling their personal investments. The decisions are effective from Tuesday, October 9.
The SEC in a media statement, after its commissioners met brokers, decided to “remove the restriction on executive directors, employees, their spouses and their nominees of all licensed stock brokers and stock dealers from selling listed shares purchased from the secondary market for a period of six months from the date of purchase.”
The Commission also decided to lift the upper limit of 20 per cent imposed on the price of transactions carried out on the crossings board of the Colombo Stock Exchange and to re-establish the status quo that existed previously in the automated trading rules
It also decided to, “amend the net capital computation in order to relax the credit granted by stock broking companies to their clients. In that the stock brokers are now permitted to extend credit to their clients three times the adjusted net capital (ie net capital minus 50 per cent of fixed assets) without having to deductoutstanding debtors from net capital. However the stock brokers are required to compute the net capital adjusting all unsettled purchase transations (over T+3) to reflect the excess of cost over market value. Further stock brokers are required to ensure strict compliance with all rules and regulations applicable for extension of credit.”
Earlier the Commissioner under the chair of Thilak Karunaratne, who resigned under pressure, enforced these rules aimed at reducing alleged insider dealings and market manipulation.
- Ends- Sunday times

WoW.....and

Wack ya. Market wins we win

අනේ කාලේ වනේ වාසේ කිව්වලු

Probably 6000 or more tomorrow

My broker was so confidence about the decision over their proposal.
As per him, market will further appreciate from tomorrow to a new height.

Marketinvest wrote:Sri Lanka’s Securities and Exchange Commission (SEC), under its new chairman Nalaka Godahewa, on Monday overturned rules enforced by the previous regime, lifting credit restrictions and removing a time-bound ban on brokers selling their personal investments. The decisions are effective from Tuesday, October 9.
The SEC in a media statement, after its commissioners met brokers, decided to “remove the restriction on executive directors, employees, their spouses and their nominees of all licensed stock brokers and stock dealers from selling listed shares purchased from the secondary market for a period of six months from the date of purchase.”
The Commission also decided to lift the upper limit of 20 per cent imposed on the price of transactions carried out on the crossings board of the Colombo Stock Exchange and to re-establish the status quo that existed previously in the automated trading rules
It also decided to, “amend the net capital computation in order to relax the credit granted by stock broking companies to their clients. In that the stock brokers are now permitted to extend credit to their clients three times the adjusted net capital (ie net capital minus 50 per cent of fixed assets) without having to deductoutstanding debtors from net capital. However the stock brokers are required to compute the net capital adjusting all unsettled purchase transations (over T+3) to reflect the excess of cost over market value. Further stock brokers are required to ensure strict compliance with all rules and regulations applicable for extension of credit.”
Earlier the Commissioner under the chair of Thilak Karunaratne, who resigned under pressure, enforced these rules aimed at reducing alleged insider dealings and market manipulation.
- Ends- Sunday times

Could you please mention the direct link to the original article ?

Marketinvest wrote:Probably 6000 or more tomorrow

Every thing Short Term profit stock ....Ha haa ....

buy anything you want

Whitebull wrote:

Marketinvest wrote:Sri Lanka’s Securities and Exchange Commission (SEC), under its new chairman Nalaka Godahewa, on Monday overturned rules enforced by the previous regime, lifting credit restrictions and removing a time-bound ban on brokers selling their personal investments. The decisions are effective from Tuesday, October 9.
The SEC in a media statement, after its commissioners met brokers, decided to “remove the restriction on executive directors, employees, their spouses and their nominees of all licensed stock brokers and stock dealers from selling listed shares purchased from the secondary market for a period of six months from the date of purchase.”
The Commission also decided to lift the upper limit of 20 per cent imposed on the price of transactions carried out on the crossings board of the Colombo Stock Exchange and to re-establish the status quo that existed previously in the automated trading rules
It also decided to, “amend the net capital computation in order to relax the credit granted by stock broking companies to their clients. In that the stock brokers are now permitted to extend credit to their clients three times the adjusted net capital (ie net capital minus 50 per cent of fixed assets) without having to deductoutstanding debtors from net capital. However the stock brokers are required to compute the net capital adjusting all unsettled purchase transations (over T+3) to reflect the excess of cost over market value. Further stock brokers are required to ensure strict compliance with all rules and regulations applicable for extension of credit.”
Earlier the Commissioner under the chair of Thilak Karunaratne, who resigned under pressure, enforced these rules aimed at reducing alleged insider dealings and market manipulation.
- Ends- Sunday times

Could you please mention the direct link to the original article ?

here u go mate
http://www.sundaytimes.lk/index.php?option=com_content&view=article&id=25236:sec-lifts-sales-ban-on-brokers-relaxes-credit-restrictions&catid=77:news&Itemid=563

*SEC lifts upper limit for crossings, Nirvana for pump-and-dumpers warn analysts
*Restriction on broker transactions lifted, good for monitoring

The Securities and Exchange Commission yesterday (08) decided to relax broker credit restrictions but some brokers are concerned about the new move, especially with regard to credit as it increases systemic risk.

Releasing a statement SEC Acting Director General Prof. Hareendra Dissabandara said the commission having met yesterday decided to "amend the Net Capital computation in order to relax the credit granted by stock brokering companies to their clients. In that the stock brokers are now permitted to extend credit to their clients three times the adjusted Net Capital (i.e. Net Capital minus 50 percent of fixed assets) without having to deduct outstanding debtors from net capital. However, the stock brokers are required to compute the Net Capital adjusting all unsettled purchase transactions (T+3) to reflect the excess of cost over market value. Further stock brokers are required to ensure strict compliance with all rules and regulations applicable to the extension of credit".

Commenting on this new ruling, market analysts pointed out that in 2010 the SEC made a decision in the interest of reducing counterparty risk to ring fence the lending activities of a broker from its transactional functions. This was subsequently modified due to pressure from various quarters in permitting brokers to give short term credit – less than 30 days and any credit extended for longer periods necessitate a haircut on the amount outstanding with a 100% haircut in 120 days.

"The current ruling does away with all safeguards, in other words brokers are now permitted to give credit for any period of time. This further heightens systemic risk and does not bode well for improving investor confidence," one analyst said not wanting to be named.

The SEC will also "lift the upper limit of 20 percent imposed on the price of transactions carried out on the crossings board of the Colombo Stock Exchange and re-establish the status quo that existed previously in the automated trading rules".

"This is nirwana to pump and dumpers – it is a quite literally a license to fleece for pump and dumpers. A market price is a reflection of the price discovery process albeit sometimes it is weak thus the former rule provides a 20% range. One fails to reconcile why one would want to rescind this, what is the motive?" a market analyst asked.

The SEC will also "lift the restriction imposed on executive directors, employees, their spouses and their nominees of all licensed stock brokers and stock dealers from selling listed shares purchased from the secondary market for a period of six months from the date of purchase".

According to market analysts the former rule was a knee jerk reaction emanating from the NSB fiasco.

Banning something outright will simply incentivize someone to use a nominee to trade thus rescinding this rule is a move in the right direction for it puts an onus on the internal compliance of a firm to monitor their staff trades, therefore this change is a welcome move, analysts said.

"Generally a directive issued by a regulator it directed to the regulatee, in this case it should be to the Colombo Stock Exchange to be taken up through its rule making process and should include a detailed analysis of the thought process that went into establishing it, in this case the commissions’ actions are being disseminated via a press announcement, there is no explanation as to the thought process and the directive is with immediate effect – this is highly unusual," a broker pointed out.
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=63322

Marketinvest wrote:

Whitebull wrote:

Marketinvest wrote:Sri Lanka’s Securities and Exchange Commission (SEC), under its new chairman Nalaka Godahewa, on Monday overturned rules enforced by the previous regime, lifting credit restrictions and removing a time-bound ban on brokers selling their personal investments. The decisions are effective from Tuesday, October 9.
The SEC in a media statement, after its commissioners met brokers, decided to “remove the restriction on executive directors, employees, their spouses and their nominees of all licensed stock brokers and stock dealers from selling listed shares purchased from the secondary market for a period of six months from the date of purchase.”
The Commission also decided to lift the upper limit of 20 per cent imposed on the price of transactions carried out on the crossings board of the Colombo Stock Exchange and to re-establish the status quo that existed previously in the automated trading rules
It also decided to, “amend the net capital computation in order to relax the credit granted by stock broking companies to their clients. In that the stock brokers are now permitted to extend credit to their clients three times the adjusted net capital (ie net capital minus 50 per cent of fixed assets) without having to deductoutstanding debtors from net capital. However the stock brokers are required to compute the net capital adjusting all unsettled purchase transations (over T+3) to reflect the excess of cost over market value. Further stock brokers are required to ensure strict compliance with all rules and regulations applicable for extension of credit.”
Earlier the Commissioner under the chair of Thilak Karunaratne, who resigned under pressure, enforced these rules aimed at reducing alleged insider dealings and market manipulation.
- Ends- Sunday times

Could you please mention the direct link to the original article ?

here u go mate
http://www.sundaytimes.lk/index.php?option=com_content&view=article&id=25236:sec-lifts-sales-ban-on-brokers-relaxes-credit-restrictions&catid=77:news&Itemid=563

Thanks friend.What will happen tomorrow

http://www.ft.lk/2012/10/09/sec-gives-fresh-boost-to-bourse/

The other decision was to lift restrictions imposed on executive directors, employees, their spouses and nominees of stock brokers and dealers from selling listed shares purchased from the secondary market for a period of six months from the date of purchase.

What a showstopper..

Now face the next level of manipulation... Thanks SEC

Now brokers can dump all their crap on retailers..

I really like this. Mkt should be less restrictions, but controlls should be their. taking credit is the risk of the purchaser and giving credits is the risk of the brokers firm.Both parties should manage it, i mean we can't do anything for that.

Small no body can dump shares on anybody. that is totally wrong. when buying shares the buyers should have a clear idea of what is he doing. if it is not the case what shall we do for it.

Now take this NSB TFC deal. broker restrictions suddenly came in to effect because of that. Just think about the genuine people, now that thay can't do a transaction withing six months time period. Now who is responsible for that blunder (TFC NSB) without taking thoes people for ......... what is the point of putting a rulling to the mkt.

think wisely. i like this.........

bandara 123 wrote:
Small no body can dump shares on anybody. that is totally wrong. when buying shares the buyers should have a clear idea of what is he doing. if it is not the case what shall we do for it.

You're absolutely correct abt a market being without restriction.. I also like that.. But we have few morons here who wills top at nothing until they make the ppl fools. They have the support of their brokers too..

So do buyers have a clear idea of what they buy? I do not think so.. Why? Most buyers buy what brokers ask them to buy and most brokers will advice to buy crap cuz its the next big thing to boom

bandara 123 wrote:

Now take this NSB TFC deal. broker restrictions suddenly came in to effect because of that. Just think about the genuine people, now that thay can't do a transaction withing six months time period. Now who is responsible for that blunder (TFC NSB) without taking thoes people for ......... what is the point of putting a rulling to the mkt.

think wisely. i like this.........

This was an eye opener imo.... Even a ruling couldn't be used to outdone deals like these. Its the shady nature of the directors involved..
Can any one straighten the tail of a dog?

Stop at reversing the deal would not be suffice.. These crooks to be brought to justice and prosecuted for their wrong doing..

Bandara, in mature market, i.e. Canada, directors are not allowed to buy their own company shares.. There are specific authorities to sought for if in need.. But ours do not have such that's why our guys play games with these..
What directors have to do is; Buy a considerable amt and announce that they bought it.. Then our retailers rally around to own a piece of it.. This brings the demand and hence the price action starts.. While our retailers are busy collecting it, the director announces his exit

bandara 123 wrote:I really like this. Mkt should be less restrictions, but controlls should be their. taking credit is the risk of the purchaser and giving credits is the risk of the brokers firm.Both parties should manage it, i mean we can't do anything for that.

Small no body can dump shares on anybody. that is totally wrong. when buying shares the buyers should have a clear idea of what is he doing. if it is not the case what shall we do for it.

Now take this NSB TFC deal. broker restrictions suddenly came in to effect because of that. Just think about the genuine people, now that thay can't do a transaction withing six months time period. Now who is responsible for that blunder (TFC NSB) without taking thoes people for ......... what is the point of putting a rulling to the mkt.

think wisely. i like this.........

Totally agree with you ..
Nobody force you to buy ..we buy thinking of profits ..some times we lose ..thats the part and parcel of the game ..

Or else you can be a smart invester ..after a careful research you can get in to securities ..
Am sure we will go to new hights now and if you invest wisely all can be winners ..

Play safe ...

Thank you Mr Godahewa & all those who swet for this startin g from Mr.Dilith Jayaweera ..

Let's all contribute to the lottery to gift a car or make another pool in the broker hut owners backyard as Thilak said.

aj wrote:Let's all contribute to the lottery to gift a car or make another pool in the broker hut owners backyard as Thilak said.

bandara 123 wrote:I really like this. Mkt should be less restrictions, but controlls should be their. taking credit is the risk of the purchaser and giving credits is the risk of the brokers firm.Both parties should manage it, i mean we can't do anything for that.

Small no body can dump shares on anybody. that is totally wrong. when buying shares the buyers should have a clear idea of what is he doing. if it is not the case what shall we do for it.

Now take this NSB TFC deal. broker restrictions suddenly came in to effect because of that. Just think about the genuine people, now that thay can't do a transaction withing six months time period. Now who is responsible for that blunder (TFC NSB) without taking thoes people for ......... what is the point of putting a rulling to the mkt.

think wisely. i like this.........

When you cant regulate.. you need restriction ..that is the case in SL because all are connected

It is good to have a free market.. but uncontrolled credit will bring a systematic risk.. it is not only risk the borrower and the lender

the stock brokers are now permitted to extend credit to their clients three times the adjusted Net Capital (i.e. Net Capital minus 50 percent of fixed assets) without having to deduct outstanding debtors from net capital.

Does it mean if the broker borrow 10 billion from some bank it's not deducted from the capital but the burrowed money pumps up the ability to give more credit without it the debt money deducted from the credit limit? Sounds like Godahewa have given limitless credit.

Yeah, lets all contribute to that swimming pool at Mr.Brokers backyard.

I hope the pensioners would also contribute with their lifetime savings, after hearing all the CSE "INVESTOR" promotions going from town to town.

Law is enforced to protect the rights of people who can enjoy the benefits throughout the life time equally irrespective of man made differences....Such practices are applicable in both social & business environment.

Share market concerned some school of thoughts may argue that reposing certain regulations push up the speed of capital markets which jack up sustenance of economic development. Time has come up again to re think the how far such benefits are fairly distributed.

http://forum.srilankaequity.com/t23566-what-do-you-think#141095

cast your vote

CT bought GREG recently as I can remember

sec is trying to make another bangladesh market