SEC backs proposed association for independent minority shareholders

The Securities and Exchange Commission (SEC) doesn't have powers to deal with all the problems of small shareholders or IMS ( Independent Minority Shareholders) as corporate entities are governed not only by the SEC Act but under a number of other legislation too. This was stated by Ms Surana Fernando, Director Corporate Affairs, SEC while speaking at a recent forum to discuss the formation of an association to safeguard the interests of IMS organized by Business Times (BT), in Colombo last week. She said that they are to consider the problems of investors, but noted that it need to be clarified that the SEC does not have the jurisdiction of solving all the problems of investors as corporate entities are governed by several other enactments. She said that they have been seriously thinking of the formation of an association for IMS and have also studied the working of such associations in other countries, like Malaysia, Thailand and Canada.

She said that they have also discussed with other countries which have similar associations to get the right model.

Ms Fernando said that this association that is envisaged has to be independent and be limited by guarantee. In addition to its independenc, funding has to be ensured for the running while it should provide quality analysis.

She emphasized that as a group the association would have more strength to look after the rights of IMS rather than doing it as individuals would not sometimes be successful. She said "My request is to select very independent and respected people of the society to run this association and then only the strength will come."