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SEC Chief Warns 'Naughty Boys' and Urges Strict Professional Ethics

Speaking at the Institutional Investor Forum titled "From Resilience to Sustainable Growth" at the Shangri-La Hotel Colombo, Securities and Exchange Commission (SEC) Chairman Senior Prof. D.B.P.H. Dissabandara issued a direct warning to market participants against capital market offenses, cautioning that regulatory patience has reached its limit after two years of close observation.

Addressing capital market leaders and financial professionals, Prof. Dissabandara pointed out that under the current market setup, where trading volumes and investor participation remain very low, even a small transaction quantity can alter stock market indices. Under these conditions, he stressed the urgent need to guard against capital market offenses, specifically targeting market manipulation.

"Now we have a big role to play as stock market professionals," Prof. Dissabandara stated, urging market participants not to facilitate artificial market movements. "So when you see this kind of a situation, please do not become a contributory factor."

The SEC Chairman emphasized that the current environment is strictly governed by the new Act, making it distinct from earlier market cycles in 2010, 2011, and 2012. Directing his remarks specifically to stockbrokers, he urged the broking industry to remain vigilant and close any loopholes or windows that allow manipulative behavior, warning that non-compliance "will be very unpleasant."

Acknowledging the industry's overall conduct over the past two years, during which the regulator observed every bit of market behavior closely, Prof. Dissabandara candidly remarked: "There were a few naughty boys, yes. And we passed the message. And in time to come, there is no excuse."

He made it clear that after two years of monitoring, "there is a limit" and the regulator expects strict seriousness going forward. To strengthen professional standards across the market, the SEC Chairman announced plans to expand Continuing Professional Development (CPD) programs to ensure market professionals advise clients in a healthy, transparent, and highly professional manner