SEC Directive on Minimum Financial Requirements applicable to certain categories of Market Intermediaries

SEC SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA ශ්රී ලංකා සුරැකුම්පත් හා විනිමය කොමිෂන් සභාව இலங்கை பிணையங்கள் மற்றும் பரிவர்த்தனை ஆணைக்குழு

15th October 2024
Ref: SEC/DG/2024/10/495

TO: INVESTMENT MANAGERS, CREDIT RATING AGENCIES, MARGIN PROVIDERS, MANAGING COMPANIES, UNDERWRITERS, CORPORATE FINANCE ADVISORS, STOCK BROKERS AND STOCK DEALERS

DIRECTIVE ISSUED UNDER AND IN TERMS OF SECTION 16(C) OF THE SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA ACT, NO. 19 OF 2021

RE: MINIMUM FINANCIAL REQUIREMENTS APPLICABLE TO CERTAIN CATEGORIES OF MARKET INTERMEDIARIES

The Securities and Exchange Commission of Sri Lanka at its 506th meeting held on 03rd September 2024 resolved to revise the 'Minimum Financial Requirements' for the following categories of Market Intermediaries.

Market Intermediary Category*	Minimum Shareholders’ Funds requirement (LKR)	Minimum Liquid Capital Requirement
Investment Manager	7.5 million Or 50% of Stated Capital whichever is higher	2.5% of total liabilities
Credit Rating Agency	15 million Or 50% of Stated Capital whichever is higher	2.5% of total liabilities
Margin Provider	30 million Or 50% of Stated Capital whichever is higher	2.5% of total liabilities
Managing Company	25 million Or 50% of Stated Capital whichever is higher	2.5% of total liabilities
Underwriter	50 million	The Liquid Capital requirement will be determined case by case, based on the value underwritten. Accordingly, at the time of obtaining approval of the SEC for any underwriting obligation, the entity shall demonstrate availability of Liquid Capital equivalent to the value underwritten.
Corporate Finance Advisor	7.5 million Or 50% of Stated Capital whichever is higher	2.5% of total liabilities
Stock Broker and Stock Dealer	Shall comply with the Minimum Financial requirements as determined by the Exchange.

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SEC SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA Continuation Sheet

i) This Directive is issued in furtherance of the SEC Rules applicable to Market Intermediaries issued by way of Gazette No. 2271/09 dated 15th March 2022 in terms of section 183 of the Securities and Exchange Commission of Sri Lanka Act. No. 19 of 2021 and the applicable provisions of the said Act;

ii) Entities acting under multiple licensing categories shall comply as follows:
a. minimum Shareholders’ Funds requirement (LKR) shall be the highest value stipulated amongst the applicable categories. b. minimum Liquid Capital requirement shall be 2.5% of total Liabilities of the category.

SEC Directive dated 26th April 2023 bearing reference SEC/DG/2023/04/91 is hereby rescinded.

This Directive shall be called, 'Minimum Financial Requirements applicable to certain categories of Market Intermediaries Directive' and shall come into effect from the date hereof.

Chinthaka Mendis
DIRECTOR GENERAL