COLOMBO (EconomyNext) – Sri Lanka’s capital markets regulator, the Securities and Exchange Commission (SEC), plans to make it mandatory for stock brokers to have telephone records of orders from clients, a newspaper report said.
The Sunday Times said the SEC was taking a tough stand against wrongdoing in the past by traders that went unchecked or was covered up.
Although Colombo Stock Exchange (CSE) rules already stipulate that brokering houses use a telephone recording system to record clients’ order instructions and maintain these records for at least six years, it has not been properly implemented.
The newspaper quoted an SEC official as saying that under CSE rules the stockbrokers have the option to obtain written instructions from clients and maintain these records for at least six years.
“ . . . but now the SEC wants to make this rule mandatory as the regulator has received many complaints pertaining to client – broker transactions,” the report said, noting that there were disputes about certain instructions from clients and irregular transactions.
Currently only NDB Stockbrokers and Capital Alliance use a telephone recording system, the newspaper said.
The Sunday Times said the SEC was taking a tough stand against wrongdoing in the past by traders that went unchecked or was covered up.
Although Colombo Stock Exchange (CSE) rules already stipulate that brokering houses use a telephone recording system to record clients’ order instructions and maintain these records for at least six years, it has not been properly implemented.
The newspaper quoted an SEC official as saying that under CSE rules the stockbrokers have the option to obtain written instructions from clients and maintain these records for at least six years.
“ . . . but now the SEC wants to make this rule mandatory as the regulator has received many complaints pertaining to client – broker transactions,” the report said, noting that there were disputes about certain instructions from clients and irregular transactions.
Currently only NDB Stockbrokers and Capital Alliance use a telephone recording system, the newspaper said.
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