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CSE reclarifies 1 Feb circular

04 Feb 2021

In a statement issued yesterday (3), the Colombo Stock Exchange (CSE) noted that the circular it issued on 1 February, on information pertaining to credit extended by stockbroker firms, has not in any way placed restrictions on the ability of stockbroker firms to extend credit on any particular security.  The statement further noted that the CSE does not have any limitations of any kind on the tradability of any security by any investor.  The statement comes following a circular issued on 1 February requesting information on credit extended by stock broker firms. The information required by the CSE included debtors’ and creditors’ age analyses for specified categories, the computation of excess of cost-over-market value for unsettled purchase transaction on an individual client basis, overdraft position of each client fund and firm fund bank account maintained by the stockbroker firm, and confirmation of liquid assets less obligations as at the end of each week, commencing from the week ending 22 January 2021.  In addition to this, stockbroker firms were also asked to forward the reports and analysis of Browns Investments PLC, LOLC Holdings PLC, Expolanka Holdings PLC, Industrial Asphalts (Ceylon) PLC, Sierra Cables PLC, BPPL Holdings PLC, and Piramal Glass Ceylon PLC. However, yesterday, the CSE stated that the request for information was done routinely to enable the Securities and Exchange Commission (SEC) and the CSE to better understand the nature of such credit extended, purely for purposes of analysing and assessing systemic risks in fulfilling its functions to maintain the stability of the market and for the protection of investors, and not to single out any specific entity or investor.  The CSE further added that it welcomes the recent heightened activity levels of the stock market, and is acutely aware of its responsibilities in supporting the medium and long term sustainability of all market participants.


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