Through the budget proposals for 2016, Finance Minister Ravi Karunanayake had proposed the merger of Sri Lanka’s stock broking companies. He pointed out that share brokers face considerable difficulties due to the instability of the stock market and that they themselves need to stabilize themselves to ensure the long term development of the capital market.

When Adaderanabiz.lk inquired from Colombo Stockbrokers’ Association chairman and Director of Candor Group, Ravi Abeysuriya, he said, “This is a good proposal. There are more brokering companies than needed at the stock market, this increasing unnecessary competition among them. This has resulted in their ignoring good practices as a policy and concentrating only on profits.”

He added that it would be good move if a procedure authorized by the Securities and Exchange Commission (SEC) is introduced for merging the stock broking companies. He also said that such a procedure had been successfully implemented in Malaysia.

When Adaderanabiz.lk inquired from Ravi Abeysuriya about the SEC providing new licenses to several brokering companies some four years ago, he said, “Due to the heavy surge of the stock market during 2009 to 2010 the SEC took steps to issue licenses to new stock broking companies. That was unnecessary. There would be no issues if the daily turnover is in billions. But up to now, the daily turnover has been only up to 600 to 700 million. So, there are no transactions that need around 28 brokering companies. Hence, the move to merge the stock broking companies is good.”

Ravi Abeysuriya added that the budget proposal to remove the government to tax 0.3 per cent on every share transaction could be considered a favourable beginning.

Currently, there are 28 licensed companies engaged in stock broking. Among them, 15 companies are full-time members at the stock market while the other 13 are Trading Members.