Financial market specialists are calling for a collective group to represent the interests of all stakeholders in the capital market in a bid to put forward a balanced and inclusive point of view on matters relating to the industry.
“Recently, in a concept paper to some investment bankers, investors and investors we suggested a Joint Association of Capital Market Participants (JACMP) which will collate and balance different interests of a wide number of stakeholders in the capital market and proactively promote the development of the capital market," Harsha N. de Silva, Managing Director Navara Capital Ltd who drafted this paper on behalf of his company, told the Business Times.
He said that the JACMP also proposes to engage the Colombo Stock Exchange (CSE), the Securities and Exchange Commission (SEC) and the Government in its efforts. "The main aim of JACMP will be to develop the capital market and it will address, discuss, debate, to arrive at consensus and to make representations and lobby with regard to any matter, which may directly and indirectly affect the Sri Lankan capital market," he explained.
Mr. De Silva also noted that open discussions with association representatives will help to merge individual interests into a united view for the betterment of all stakeholders.
“Currently the sole representative and voice representing the capital market is the Colombo Stock Brokers Association (CSBA) which I believe (by the nature of the membership) may not represent the general view of all participants in the market. All other stakeholders currently do not have a formal, recognizable voice in matters affecting the status quo or the development of the capital market and the JACMP can act as an intermediary to communicate and discuss member’s grievances, suggestion and disputes with regard to capital market related issues by being the bridge between parties involved,” he added.
He also noted that by liaising with the other regulatory bodies such as the Central Bank, the Ministry of Finance, etc, this collective forum can take the necessary measures for fostering the development of capital markets, and hence contribute to the efficient allocation of financial resources in the country.
“JACMP will ensure investor protection and building and maintaining investor confidence while being a representative to international forums from where we can seek different experiences which will help the members to gain global knowledge on capital market-related fields such as derivative market and commodity markets in the future," he added. He also noted that this association envisages helping develop efficient market supportive policies in the capital market both in the short-term and long-term by considering industry views prior to making policy decisions which help to overcome practical scenarios that the industry is experiencing at this time.
Mr. De Silva said that it’s proposed that the JACMP will be made up of representatives from the constituent of sub committees and/or associations and that existing associations such as CSBA and the Unit Trust Association is to be joined by associations representing the other market participants.
“JACMP shall have a governing board representing the participants and shall have a fulltime CEO and a supporting administrative team. Participant’s member fees shall go towards the upkeep of a permanent office and staff remuneration. Internal constitution will ensure the inclusiveness, transparency, fairness and accuracy of the decisions and the decision making process," he explained further.
He added that an association member can review and revisit objectives and operations of the JACMP to safeguard their interest as a whole from time to time.