{"id":165526,"date":"2016-07-20T13:20:13","date_gmt":"2016-07-20T07:50:13","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=165526"},"modified":"2016-07-20T22:23:12","modified_gmt":"2016-07-20T16:53:12","slug":"let-sec-supervise-bond-issues-and-related-secondary-market-transactions-jayaratne-tells-coomaraswamy","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/let-sec-supervise-bond-issues-and-related-secondary-market-transactions-jayaratne-tells-coomaraswamy\/","title":{"rendered":"Let SEC Supervise Bond Issues And Related Secondary Market Transactions: Jayaratne Tells Coomaraswamy"},"content":{"rendered":"

Good governance activist and former Chairman of the Ceylon Chamber of Commerce, Chandra Jayaratne<\/span><\/a> has requested the new Central Bank Governor, Dr. Indrajit Coomaraswamy<\/span><\/a>, to let the Securities and Exchange Commission (SEC) be the regulatory oversight over Government bond issues<\/span><\/a> and the related secondary market transactions.<\/p>\n

\"Indrajit<\/a>

Indrajit Coomaraswamy<\/p><\/div>\n

In a letter addressed to Dr. Coomaraswamy on July 18, Jayaratne said, \u201cthe Securities & Exchange Commission that the Securities & Exchange Commission, needs to make a minor amendment to its empowering enactment, to undertake this expanded role of supervision of the Government Bond issues and associated secondary market transaction.\u201d<\/p>\n

\u201cI trust that you and the Monetary Board, will immediately begin negotiation with the Securities & Exchange Commission and the Government, for the formal transfer of the oversight responsibility over Government Bond Issues and associated Secondary Market dealings, to the Securities & Exchange Commission.\u201d<\/p>\n

Citing reasons for his request, Jayaratne recalled the recent controversial bond issues, which he noted had clearly demonstrated that the Central Bank suffers from definite conflicts of interests.<\/p>\n

\u201cWhilst acknowledging that the Central Bank of Sri Lanka has competent professionals and infrastructure support to provide the oversight framework as set out above, recent controversial bond issues related experiences have clearly demonstrated that the Central Bank suffers from definite conflicts of interests, due its role in
\n\u2022 Being the primary issuer and manager of the Government Bond issues;
\n\u2022 Being the effective Manger and Portfolio Investor of the largest Securities market player in Sri Lanka \u2013 the Employees Provident Fund.\u201d<\/p>\n

\u201cIn addition, it is commonly believed that the secondary market information data set maintained by the Central Bank is inadequate and incomplete for effective regulation of market and associated intermediaries. It is reported that the records maintained in the Central Bank, covering the secondary market transactions, fail to record the basic market data relevant to the prices at which the secondary market transactions have taken place,\u201d Jayaratne added.<\/p>\n

Below is the full text of Jayaratne\u2019s letter;<\/p>\n

Dr. Indrajit Coomaraswamy,
\nGovernor, Central Bank,
\nCentral Bank of Sri Lanka,
\nJanadhipathi Mawatha,
\nColombo 1.<\/p>\n

Dear Sir,<\/p>\n

Regulatory Oversight Accountability over Government Bond Issues and Related Secondary Market Transactions<\/strong><\/p>\n

You would no doubt agree, that effective and professional best practices embedded regulatory oversight over Government bond issues and related secondary market transactions, ensuring that engaged intermediaries duly discharge their professional commitments in line with best market practices, are an essential imperative of a well governed securities market in Sri Lanka.<\/p>\n

Such a governance framework is also an essential investor right, as endorsed by the Securities & Exchange Commission of Sri Lanka and the Chartered Financial Analysts Society of Sri Lanka ( refer attachment). These rights need to be duly discharged through ensuring that; \u201call associated financial professionals and intermediary organizations are<\/p>\n