SEC takes matters to heart, advises investors on stocks
The Securities and Exchange Commission (SEC) this week in a newspaper advertisement laid bare 'factors' to consider before investing in the share market. This came on the back of many stakeholders pointing out that SEC should make investors aware of the potential risks and threats in the Colombo stock market in order to curb their gullibility of falling into pump and dump situations.
“Before you get started you should know the basics of stock market investing and at all times you should obtain advice from registered stock brokers, but the final decision is yours,” the SEC said were amongst the factors to consider before getting into the stock market. It also said that the ‘regulator’s job is ensuring that listed firms disclose price sensitive information, enabling investors to take informed investment decisions. It said that if one wants to buy shares through Initial Public Offerings (IPO) they should carefully ‘read the Prospectus’ before making a decision.
The regulator also said in an announcement that it will file action against one stock broker and has warned five others pertaining to activities of a manipulative nature. SEC also said that it warned two investors, a move reported by the Business Times last week.
The SEC also imposed a cap on the allocation for small investors in large initial public offerings and doubled the value of subscriptions in that category, which they announced separately, this week. The regulator said that IPOs valued at or above Rs 3 billion need to reserve 40% for retailers or shares to the maximum value of Rs 1.5 billion - whichever is lower.
SEC said that this move was in a bid to further facilitate the fair allotment of shares to the retail individual investor category in large scale initial public offerings, in a statement.