“The public is hereby cautioned that the Securities and Exchange Commission of Sri Lanka has become aware of a growing number of unsolicited phone calls from persons claiming to be agents of international stock broker firms, offering to facilitate your investment in shares of companies traded on offshore jurisdictions with a promise of guaranteed high returns,” the SEC said in a public notice.
While Sri Lankans can invest in shares traded in overseas stock exchanges as part of portfolio diversification across different geographies, it is uncertain how such investments could be made when the country has imposed some tougher measures to curb outward remittances in view of the slowdown in foreign inflows amid coronavirus.
On April 9, Sri Lanka suspended outward remittances for investments overseas through outward investment accounts by persons resident in Sri Lanka for three months excluding investments to be financed out of foreign currency loans obtained by an investor or from a person resident outside Sri Lanka under the provisions of the Foreign Exchange Act or investments to be made to fulfill the regulatory requirement in that country.
While these are typically major transactions, any foreign outflow, irrespective of its size are informed to the Central Bank.
The list of stockbroker firms licensed by the SEC is available the regulator’s website and also on the website of the Colombo Stock Exchange.
“The SEC does not regulate nor grant licenses to anyone to operate in other jurisdictions or to act as agents of international stock brokers firms,” the notice said.
The SEC however did not say whether they had informed the law enforcement authorities to conduct investigations on these calls to identify from where they had originated.