Right of Reply
The Colombo Stock Exchange (CSE) has sent the following response to the article under the above headline which appeared in the Business Times last week. Extracts:
The CSE wishes to clarify certain issues raised in the said article with regard to the role of the CSE in safeguarding the interests of the investors when handling complaints made by investors against stockbroker firms.
The procedure to be adopted by the CSE in respect of “Client-Stockbroker Dispute Resolution” is stipulated in Section 10 of the Stockbroker Rules of the CSE. In terms of Rule 10.2 (read in conjunction with Rule 10.3) of the said Stockbroker Rules, an investor may refer to the CSE, a complaint against a Stockbroker Firm with regard to transactions that have been carried out in his/her CDS Account and such complaint will be dealt with by the officials appointed by the Chief Executive Officer of the CSE.
The Secretariat of the CSE will arrive at its decision in accordance with the Stockbroker Rules of the CSE based on the representations (verbal and written) made by the parties concerned and any documentary evidence furnished to the CSE. The decision of the Secretariat of the CSE and the reasons for such decision will be communicated to the parties in writing. In the event, if either party is not satisfied with the decision of the Secretariat of the CSE, such party may appeal to the Dispute Resolution Committee of the CSE (a sub Committee of the CSE Board), within a period of twenty one (21) days of the decision, for an adjudication of such decision.
The CSE assures the public that the CSE has been inquiring into complaints made by investors against stockbroker firms in an independent and transparent manner and at no time has attempted to mislead investors or treat them indifferently.
The decision of the Secretariat of the CSE with regard to the complaint made by Ms. Harshani Wijenaike has been based on the observations made by the CSE in regard to the rights and obligations of the parties in this regard and the CSE has communicated to the parties the reasons (with reference to the relevant documentary evidence) for arriving at the said decision.
Further, with regard to concerns that have been raised in connection with the CDS Account that has been opened in the name of Ms. Wijenaike’s mother, it will be appreciated by the party concerned that ascertaining the authenticity of the documents in question is not a matter within the regulatory purview of the CSE. In the circumstances, the matter can be referred to a competent authority by the party concerned and the CSE assures its fullest co operation in connection with any investigation carried out by such competent authority in this regard. The Secretariat of the CSE has not yet finalized the decisions with regard to the complaints made to the CSE by Mr. K P Somaratne and Mr. S.P.S.S. de Silva.
The CSE notes with growing concern that many investors complain to the CSE years after the disputed transactions have been carried out in their CDS Accounts despite the advice given on the reverse side of the monthly Statements dispatched by the CDS (in all three languages) and the Contract Notes requiring investors to bring any disputed transactions to the attention of the Compliance Officer of the Stockbroker Firm / CSE immediately.”
Business Times: Ms. Wijenaike when contacted by the Business Times denied statements made pertaining to her enquiry.
“I was sent correspondence by the CSE saying that I have to respond to a disputed transaction within 21 days and my enquiry came when the time had lapsed. Why I didn’t complain during the said time period was thrown at me many times. It was mainly because I didn’t have enough confidence to do so and with the past regime it was near impossible,” she said, pointing out that in a court of law, this argument does not arise as a complaint has to be perused thoroughly irrespective of the time frame.
“I was also told that it’s my ‘responsibility’ to be informed of the CDS transactions as I had SMS correspondence with my stockbroker. How can this be held as my responsibility? I didn’t get any documents on my transactions.
I never got any statements on my margin accounts. Also I have never received a document on credit extension. I also never signed to open a margin account,” she said.
“The stockbroker at the meeting with all three parties couldn’t come up with any documentation pertaining to my credit agreement or the margin account,”she added, further stating that when she kept on asking for these documents, the broker kept mum.
“The CSE officials also didn’t request the broker for it. I shouted myself hoarse asking the broker to produce documentation and all they did was divert the discussion saying I was well aware of what took place in this entire incident.”
Ms. Wijenaike insisted that she had ‘only’ signed an account opening document. “My broker had opened an online trading account for me. The stockbroking advisor had signed this online trading account opening form and had traded on it.”
When the Business Times reverted to Rajeeva Bandaranaike, CEO CSE, he said that Ms. Wijenaike can always respond to the Dispute Resolution Committee of the CSE (a sub Committee of the CSE Board), within a period of 2) days of the decision, for an adjudication of such decision.
But, Ms. Wijenaike in turn said she wasn’t aware of such an entity. “We’re not properly communicated on what we should or shouldn’t do.”
The Colombo Stock Exchange (CSE) has sent the following response to the article under the above headline which appeared in the Business Times last week. Extracts:
The CSE wishes to clarify certain issues raised in the said article with regard to the role of the CSE in safeguarding the interests of the investors when handling complaints made by investors against stockbroker firms.
The procedure to be adopted by the CSE in respect of “Client-Stockbroker Dispute Resolution” is stipulated in Section 10 of the Stockbroker Rules of the CSE. In terms of Rule 10.2 (read in conjunction with Rule 10.3) of the said Stockbroker Rules, an investor may refer to the CSE, a complaint against a Stockbroker Firm with regard to transactions that have been carried out in his/her CDS Account and such complaint will be dealt with by the officials appointed by the Chief Executive Officer of the CSE.
The Secretariat of the CSE will arrive at its decision in accordance with the Stockbroker Rules of the CSE based on the representations (verbal and written) made by the parties concerned and any documentary evidence furnished to the CSE. The decision of the Secretariat of the CSE and the reasons for such decision will be communicated to the parties in writing. In the event, if either party is not satisfied with the decision of the Secretariat of the CSE, such party may appeal to the Dispute Resolution Committee of the CSE (a sub Committee of the CSE Board), within a period of twenty one (21) days of the decision, for an adjudication of such decision.
The CSE assures the public that the CSE has been inquiring into complaints made by investors against stockbroker firms in an independent and transparent manner and at no time has attempted to mislead investors or treat them indifferently.
The decision of the Secretariat of the CSE with regard to the complaint made by Ms. Harshani Wijenaike has been based on the observations made by the CSE in regard to the rights and obligations of the parties in this regard and the CSE has communicated to the parties the reasons (with reference to the relevant documentary evidence) for arriving at the said decision.
Further, with regard to concerns that have been raised in connection with the CDS Account that has been opened in the name of Ms. Wijenaike’s mother, it will be appreciated by the party concerned that ascertaining the authenticity of the documents in question is not a matter within the regulatory purview of the CSE. In the circumstances, the matter can be referred to a competent authority by the party concerned and the CSE assures its fullest co operation in connection with any investigation carried out by such competent authority in this regard. The Secretariat of the CSE has not yet finalized the decisions with regard to the complaints made to the CSE by Mr. K P Somaratne and Mr. S.P.S.S. de Silva.
The CSE notes with growing concern that many investors complain to the CSE years after the disputed transactions have been carried out in their CDS Accounts despite the advice given on the reverse side of the monthly Statements dispatched by the CDS (in all three languages) and the Contract Notes requiring investors to bring any disputed transactions to the attention of the Compliance Officer of the Stockbroker Firm / CSE immediately.”
Business Times: Ms. Wijenaike when contacted by the Business Times denied statements made pertaining to her enquiry.
“I was sent correspondence by the CSE saying that I have to respond to a disputed transaction within 21 days and my enquiry came when the time had lapsed. Why I didn’t complain during the said time period was thrown at me many times. It was mainly because I didn’t have enough confidence to do so and with the past regime it was near impossible,” she said, pointing out that in a court of law, this argument does not arise as a complaint has to be perused thoroughly irrespective of the time frame.
“I was also told that it’s my ‘responsibility’ to be informed of the CDS transactions as I had SMS correspondence with my stockbroker. How can this be held as my responsibility? I didn’t get any documents on my transactions.
I never got any statements on my margin accounts. Also I have never received a document on credit extension. I also never signed to open a margin account,” she said.
“The stockbroker at the meeting with all three parties couldn’t come up with any documentation pertaining to my credit agreement or the margin account,”she added, further stating that when she kept on asking for these documents, the broker kept mum.
“The CSE officials also didn’t request the broker for it. I shouted myself hoarse asking the broker to produce documentation and all they did was divert the discussion saying I was well aware of what took place in this entire incident.”
Ms. Wijenaike insisted that she had ‘only’ signed an account opening document. “My broker had opened an online trading account for me. The stockbroking advisor had signed this online trading account opening form and had traded on it.”
When the Business Times reverted to Rajeeva Bandaranaike, CEO CSE, he said that Ms. Wijenaike can always respond to the Dispute Resolution Committee of the CSE (a sub Committee of the CSE Board), within a period of 2) days of the decision, for an adjudication of such decision.
But, Ms. Wijenaike in turn said she wasn’t aware of such an entity. “We’re not properly communicated on what we should or shouldn’t do.”
sundaytimes.lk
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