SEC to go ahead with cold-storing stock broking licences
The cold-storage of broker licences where stockbrokers can hold on to their licences, but not trade is to be approved by the Securities and Exchange Commission (SEC), officials say.
The Colombo Stock Exchange (CSE) two years ago proposed to the SEC to cold storage struggling stockbrokers’ licences. “It’s to be approved by next month,” an official told the Business Times.
The risk based Capital Adequacy Requirement (CAR) of 1.2 times the risk requirement of stockbrokers subject to a minimum liquid capital requirement of Rs. 35 million that was made applicable to all stockbroker firms in 2016 prompted the CSE to propose the cold storage of broker licences. Recently Nation Lanka Equities, Navara Securities, TKS Securities and Claridge Stockbrokers trading activities were barred due to non-compliance.
The CSE in its recent circular further revealed that these barred broker firms will only be permitted to resume all trading activities no sooner they comply with the minimum Shareholders’ Fund Requirement which was implemented in January this year as applicable.