K.A.U.I. Wijayarathna
LL. B (Hons) (Colombo) Lecturer (Probationary)
Department of Private and Comparative Law Faculty of Law, University of Colombo
The listed company model allows for long-term growth, profitability, and a plethora of vast and exciting benefits for the many individuals who own shares in their companies. When a company extends an invitation to the public to own shares, it signifies the company’s steadfast dedication to upholding governance and transparency standards. This commitment is particularly evident in the context of Sri Lanka’s Colombo Stock Exchange (CSE), which positions itself as the premier choice for value and wealth creation for listed companies and promoters. Collaborating closely with its regulatory authority, the Securities and Exchange Commission, the CSE aims to maintain a regulated, transparent, and liquid market that ensures benefits for all stakeholders. The recent introduction of the Securities and Exchange Commission of Sri Lanka Act No. 19 of 2021 marks a distinctive government initiative, acknowledging the intrinsic value of robust capital markets.
This Act is designed to foster growth and encourage active participation in the stock market. Its success is evident in the establishment of effective provisions within the local legal framework, aligning with progressive modern practices on an international scale. Applying a doctrinal research approach with a qualitative methodology, January 2024 this study delves into the impact of the Securities and Exchange Commission Act on the development of the capital market. The study examines the legal powers and discretion of the Securities and Exchange Commission of Sri Lanka, with the aim of fortifying the security, prosperity, and overall stability of the capital market. In essence, the inquiry centres on assessing how the Act influences the effectiveness of listed companies and contributes to the market’s growth. This research illuminates the dynamic interplay between regulatory initiatives, legal frameworks, and the practical outcomes for stakeholders in Sri Lanka’s capital market. The findings contribute to a nuanced understanding of the Act’s efficacy and its role in shaping a resilient and vibrant financial landscape.
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