EPF/ETF to be managed by new entity

The EPF and ETF will be removed from Central Bank management and entrusted to a new entity called the “Public Wealth Trust” which will be answerable to parliament, according to the ruling United National Front election manifesto.

The move to change the management structure was also referred to by Deputy Minister of Policy Planning Harsha de Silva on Friday during the presentation of certificates and diploma awards by the Securities and Exchange Commission (SEC).

He said that certain constructive changes will be introduced in order to mitigate mismanagement of the EPF.

Dr. de Silva said the current agency functions of the Central Bank (CB) – public debt management and EPF management are associated with two conflicting objectives where in debt management the bank will always have to borrow at the lowest possible cost (interest rate) but in managing the EPF the same bank has to maximize the returns by seeking highest interest rates. "We'll remove conflicts of interests that the CB has with Public Debt Department and the EPF, which has been there since the CB's start." He added that in due course, the government will take necessary steps to restore credibility and full transparency of CB.

He was distraught on the erosion of ethics in the securities industry and noted that certain stockbrokers have evaded their ethical responsibilities and engaged in acts/omissions that breach the SEC Act in the recent past. "It's important to carry on these investigations to punish the culprits if we require building up confidence of the market. The market should create a level playing field. It's only then that we could develop the market."