Directive on Certification Programs, Viva Voce Examinations, and Continuous Professional Development for Investment Advisors

SEC | SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA | Office of the Director General ශ්රී ලංකා සුරැකුම්පත් සහ විනිමය කොමිෂන් සභාව | இலங்கை பிணையங்கள் மற்றும் பரிவர்த்தனை ஆணைக்குழு

1 August 2024

Ref: SEC/DG/2024/08/176

TO: COLOMBO STOCK EXCHANGE
ALL LICENSED STOCKBROKERS, DEALERS IN EQUITY & DEBT AND MANAGING COMPANIES OF UNIT TRUSTS/COLLECTIVE INVESTMENT SCHEMES

CERTIFICATION PROGRAMS, VIVA VOCE EXAMINATIONS AND CONTINUOUS PROFESSIONAL DEVELOPMENT PROGRAMS FOR INVESTMENT ADVISORS - DIRECTIVE ISSUED IN TERMS OF SECTION 16 (C) OF THE SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA ACT NO. 19 OF 2021

The Securities and Exchange Commission of Sri Lanka (SEC) at its 493rd Commission Meeting resolved to grant approval to the following revised terms and conditions applicable to Certification Programs, VIVA VOCE Examinations and Continuous Professional Development (CPD) programs for investment advisors.

i) This Directive is issued further to the SEC Circular no.08/2009 dated 13th October 2009 (Ref: SEC/LEG/09/10/31), SEC Directive dated 18th December 2018 (Ref: SEC/CMET/2018/12/103), SEC Circular dated 10th July 2020 (Ref: SEC/ER& CME/2020/07/09), SEC Directive dated 14th August 2020 (Ref: SEC/ER&CME/2020/08/16), SEC Circular dated 01st February 2023 (Ref: SEC/ER &CME /2023/02/05)

ii) SEC Circular no: 05/2009 dated 25th August 2009 is hereby rescinded.

Where there is an inconsistency between the Directives and Circulars mentioned in (i) above, the provisions of this Directive shall prevail.

Section 1

This section applies to all Certification Programs conducted by the SEC

1. Minimum entry requirement when registering for certification programs with previous academic and/or professional qualifications

1.1 Pass all subjects at the GCE Advanced Level examination; or

1.2 Pass all subjects at the GCE Ordinary Level examination with 2B passes for Mathematics and English and minimum of 5C passes for the remaining subjects together with a Foundation Level of a Bachelors' Degree program completed with a minimum duration of 9 months; or

1.3 First year completed of a Bachelor's Degree in Finance by a University Grants Commission of Sri Lanka (UGC) approved University; or

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SEC | SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA | Continuation Sheet

1.4 First stage completed of Chartered Institute of Management Accountants (CIMA), Association of Chartered Certified Accountants (ACCA), Institute of Chartered Accountants of Sri Lanka (CA), Chartered Institute of Marketing (CIM), or any other finance related professional qualification acceptable to the SEC.

2. Revised criteria to grant exemptions when registering for certification programs with previous academic and/or professional qualifications.

2.1 The exemptions are intended to provide a waiver as a result of previous academic or professional training of candidates. Exemptions are granted on a modular basis for each certification.

2.2 The applicant who has passed the Level II examination of the Certified Financial Analysts (CFA) program is eligible for exemptions from Securities Markets and Instruments (Series 1), Equity Securities (Series 2) Debt Securities (Series 3) and Derivatives (Series 4).

2.3 The applicant who is a passed finalist of the Chartered Institute of Management Accountants (CIMA) is eligible for exemptions from Securities Markets and Instruments (Series 1), Equity Securities (Series 2) and Debt Securities (Series 3).

2.4 The applicant who is a passed finalist of the Association of Chartered Certified Accountants (ACCA) is eligible for exemptions from Securities Markets and Instruments (Series 1), Equity Securities (Series 2) and Debt Securities (Series 3).

2.5 The applicant who is a passed finalist of the Institute of Chartered Accountants of Sri Lanka (CA) is eligible for exemptions from Securities Markets and Instruments (Series 1), Equity Securities (Series 2) and Debt Securities (Series 3).

2.6 The applicant who has obtained a Bachelor's Degree and/or Master's Degree in Finance by a UGC approved University is eligible for exemptions from Securities Markets and Instruments (Series 1), Equity Securities (Series 2) and Debt Securities (Series 3).

2.7 Exemptions for all other applicants including university graduates and holders of professional qualifications are considered on a case by case basis through an evaluation of their transcripts and syllabi for the subjects when exemptions are requested.

2.8 Exemptions are NOT granted for Financial Planning, Advising and Marketing (Series 6), and Securities Regulation and Ethics (Series 7).

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SEC | SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA | Continuation Sheet

Section 2

This section applies to the pathways of obtaining specific qualifications

1. Registered Investment Advisor – RIA

Step 1	Step 2
Complete Certificate in Capital Markets (CCM) Program	Upon completing one (1) year of relevant industry experience, face a VIVA VOCE Examination.
Subjects covered: Series 1: Securities Markets and Instruments; Series 2: Equity Securities; Series 3: Debt Securities; Series 4: Derivatives; Series 5: Unit Trusts; Series 6: Investment Planning, Advising and Marketing; Series 7: Securities Regulation and Ethics	Relevant industry experience shall be before, concurrent or after completing the certification program

2. Certified Equity Securities Advisor - CESA

Step 1	Step 2
Complete Certificate in Equity Securities (CES) Program	Upon completing six (6) months of relevant industry experience, face a VIVA VOCE Examination.
Subjects covered: Series 1: Securities Markets and Instruments; Series 2: Equity Securities; Series 6: Investment Planning, Advising and Marketing; Series 7: Securities Regulation and Ethics	Relevant industry experience shall be before, concurrent or after completing the certification program

3. Certified Debt Securities Advisor - CDSA

Step 1	Step 2
Complete Certificate in Debt Securities (CDS) Program	Upon completing six (6) months of relevant industry experience, face a VIVA VOCE Examination.
Subjects covered: Series 1: Securities Markets and Instruments; Series 3: Debt Securities; Series 6: Investment Planning, Advising and Marketing; Series 7: Securities Regulation and Ethics	Relevant industry experience shall be before, concurrent or after completing the certification program

4. Certified Collective Investment Schemes Advisor - CCISA

Step 1	Step 2
Complete Certificate in Collective Investment Schemes (CCIS) Program	Upon completing six (6) months of relevant industry experience, face a VIVA VOCE Examination.
Subjects covered: Series 1: Securities Markets and Instruments; Series 5: Collective Investment Schemes; Series 6: Investment Planning, Advising and Marketing; Series 7: Securities Regulation and Ethics	Relevant industry experience shall be before, concurrent or after completing the certification program

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SEC | SECURITIES AND EXCHANGE COMMISSION OF SRI LANKA | Continuation Sheet

Section 3

This section applies to VIVA VOCE Examination and CPD

1. Requirement for the VIVA VOCE Examination

1.1 The applicant shall be 21 years of age or above.

1.2 The applicant shall be employed or referred to the SEC by a market intermediary at the time of facing the examination.

1.3 The applicant shall be required to comply with;

(a) the fitness and propriety requirements of the SEC (link: https://www.sec.gov.lk/wp-content/uploads/2022/06/2271-09 E-Market-Intermediaries-final-2.pdf) and Colombo Stock Exchange (CSE) (link: https://www.cse.lk/pages/stockbroker-rules/stockbroker-rules.component.html) applicable to individuals intending to be appointed to serve as a person dealing with clients on behalf of a Market Intermediary.

(b) the fitness and propriety requirements of the SEC applicable to individuals intending to be appointed to serve as a person making investment decisions on behalf of a Market Intermediary (link: https://www.sec.gov.lk/wp-content/uploads/2022/06/2271-09 E-Market-Intermediaries-final-2.pdf).

2. CPD Programs

2.1 Investment Advisors are required to fulfill the annual CPD requirement in order to maintain their respective Registration/Certification. The minimum requirement is to obtain four (4) CPD seminar credits.

2.2 Non-completion of CPD requirement for two (2) consecutive years will result in the lapse of the respective Registration/Certification.

2.3 The applicant shall be required to comply with;

(a) the fitness and propriety requirements of the SEC (link: https://www.sec.gov.lk/wp-content/uploads/2022/06/2271-09 E-Market-Intermediaries-final-2.pdf) and Colombo Stock Exchange (CSE) (link: https://www.cse.lk/pages/stockbroker-rules/stockbroker-rules.component.html) applicable to individuals intending to be appointed to serve as a person dealing with clients on behalf of a Market Intermediary.

(b) the fitness and propriety requirements of the SEC applicable to individuals intending to be appointed to serve as a person making investment decisions on behalf of a Market Intermediary (link: https://www.sec.gov.lk/wp-content/uploads/2022/06/2271-09 E-Market-Intermediaries-final-2.pdf).

This Directive shall be effective from 1st August 2024.

Chinthaka Mendis
DIRECTOR GENERAL
TJ/SB