Old brokers returning to CSE with new licences
Old stockbrokers are trying to make a comeback to the market and at least one has applied for a new licence, industry sources said.
This broker has fulfilled criteria of the Colombo Stock Exchange (CSE) and is awaiting the Securities and Exchange Commission’s (SEC) nod for the final approval, they added.
Navara Securities (Pvt) Ltd (NSL), TKS Securities, Claridge Stockbrokers and Nation Lanka Equities (Pvt) Ltd (NLL) had to stop their businesses this year. The new broker is amongst one of them.
Last January NSL decided to adopt the Voluntary Inactivation of Business Operations while the CSE had decided to prohibit NLL from trading activities on October 9, 2017.
Some brokerages were planning to join NSL and cease trading and apply to the CSE to ‘freeze’ their licence”, but now with the resurgence in the CSE, they won’t.
The stockbroker firm mentioned earlier may, within two years from the effective date of inactivation of business operations of the firm, reactivate its business operations.
Certain brokering firms during the last two years have struggled and incapable even to retain the necessary daily liquidity requirements. Broking firms have cut many costs since the crisis in the CSE nearly four years ago, but still struggled. Some stockbrokers closed their outstation branches in a move to cut costs cutting and manage their bottom lines. There are better times now, they say.
The US$ 20 billion stock market has 28 stockbrokers, which is now evidently too high for such a small market, analysts say.