Sri Lanka mulls mandatory rating for stock broking firms
COLOMBO (EconomyNext) – Sri Lanka’s capital markets regulator has said it is considering a mandatory rating for stock broking firms to improve investor confidence.
Thilak Karunaratne, Chairman of the Securities and Exchange Commission of Sri Lanka (SEC), said that stock broking companies perform an important role in the capital market by facilitating trades for investors.
The stock broking industry has “progressed considerably” in the provision of services as well as in terms of the number of players in the market, he said in the SEC’s annual report.
“In order to enable especially retail investors to select a stock broker by ascertaining the credibility of the firm, the SEC is exploring the possibility of introducing a mandatory rating for stock broking firms,” Karunaratne said.
“It is envisaged that this rating will aim to preserve the integrity of the market and protect investor interest.”
Karunaratne said the SEC will have an industry consultation before implementing the proposed mandatory rating requirement.