ECONOMYNEXT – Sri Lanka’s central bank has suspended the business of NatWealth Securities Limited, a primary dealer in government securities.
NatWealth has been ordered to halt business from 4.30pm on May 31, the central bank said, following its "continuous failure to comply with directions applicable to primary dealers."
Central Bank Governor Indrajit Coomaraswamy had warned earlier that there would be no regulatory forbearance for entities.
Delays in taking action make capital shortages and other problems worse.
NatWealth has been becoming less active market participants said and it was also shopping for new investors.
"The CBSL will take necessary measures to ensure that this regulatory action does not have a disruptive impact on the Government Securities market," the regulator said.
"Action will also be taken to facilitate the handling of the interests of the customers and counterparties of NWSL in an orderly manner."
Entrust Securities, a primary dealer who failed had massive losses, partly due to alleged fraud. (Colombo/May31/2019)