What they mean by " Cease Operations ? " what happens to excising customers ?
Certain stockbroking firms in the Colombo are facing a capital crisis, reports say.
According to sources, at least 08 out of the 29 active stockbroking firms are facing a critical capital crisis.
Speaking to media, stockbrokers, regulators as well as investors have complained that chiefs of certain companies are shifting towards unethical practices, even violating stock market regulations, in a bid to recover their marginal lendings.
According to reports, the crisis ridden firms are even unable to meet the minimum capital limit. (The minimum capital limit for a stockbroking firm is Rs. 35 million.)
The crisis has occured in a backdrop of low turnover conditions in the stock market, it is said.
Meanwhile, it is revealed that a certain group of stockbrokers are prepared to request the Securities and Exchange Commission of Sri Lanka (SEC) to allow them to cease operations (without cancelling permits) and to allow them to resume once the stock market has retained its usual conditions.
(It is said that such measures were taken in Karachi and Culcutta stock markets as well)
Such measures have said to help weak stockbroking companies to overcome an unbalanced balance sheet and while retaining their permits.
In 2010, a stock market growth of 96% was seen while a growth of 100% was seen in 2011.