"In the coming year we are determined to further strengthen the regulatory and supervisory arrangements in keeping with modern trends," Karunaratne said in the regulators 2011 annual report.
"Investigation capability will certainly be enhanced and we expect better performance in this area."
The SEC has brought in a slew of new rules which has met with some resistance from market participants.
Last year it ordered brokers to cut credit and placed price ceilings on volatile stocks, as loose monetary policy and margin trading fired a stock bubble.
Interest rates increased later in the year as credit growth put Sri Lanka's dollar peg under pressure, and the market has since fallen.
The SEC also progressively relaxed credit rules. Analysts say investors who sold down their leveraged portfolios when the SEC first ordered credit to be cut would now be much better off, than others who continued to hold stocks on margin.