SEC commits Rs.22m on surveillance system

By Azhar Razak
Sri Lanka’s capital markets regulator, the Securities and Exchange Commission (SEC) says it had committed a sum of Rs.22.5 million to Millennium Information Technologies during the year 2010 to supply and install hardware and software towards implementing a new surveillance system. The new automated surveillance system negotiated and acquired from the Millennium IT (Software) Limited (MIT), a member of the London Stock Exchange was installed during the third quarter of the 2010.
“The order of hardware was delivered amounting to Rs.10.5 million and the software implementation is in progress. An advance payment amounting to Rs.5.2 million for software and implementation is reflected in the advance and prepayment account in the financial statements,” the SEC disclosed in its Annual Report published last week.
Accordingly, the regulator said that the new system is being tested with live data of the CSE for bug fixing and fine tuning.
“The MIT new system would support multidimensional historical data, have the capability for pattern recognition to quickly identify abnormal situations/transactions, and provide an analytic platform that supports and accelerates investigations and research functions of the SEC. The system can be linked to several data bases of insiders of listed companies, their related parties and market intermediaries to accommodate speedy detection of insider dealing,” the regulator said. The SEC conducts in-depth surveillance analysis of trading data, reviews surveillance reports received from the Colombo bourse, prepares surveillance reports and makes recommendations on appropriate action to be taken in relation to surveillance findings.
“We engage in real time monitoring of the market to detect abnormal market movements and manipulations in order to protect the integrity of the securities market and its participants,” the annual report said.
It added that in the year 2010, SEC had forwarded 30 referrals to the Surveillance and Investigations Committee of the SEC for perusal.



“33% detections were possible cases of insider dealing, 27% - market manipulations, 7% were reported as front running whilst the remaining 33% issues related to takeovers and mergers, rumour verifications and dealing by directors of Default Board companies,” the SEC noted.
SEC Chairperson Indrani Sugathadasa in her message said, “We believe that the foundation to establish a robust and efficient capital market is creating an effective securities regulatory regime. An effective securities regime will ensure that the market is operated efficiently and fairly, and in turn, it will enhance investor confidence. Also a well regulated market has the potential to encourage additional investors to partake and contribute to further development of the economy”.
The SEC has formulated a three year plan consistent with the government’s strategic priorities and endeavoured to ensure that the SEC continues to play a significant role in the securities regulatory landscape.
“We have recognised five key strategic goals, namely facilitating improvements in the capital market infrastructure, facilitating improvements in liquidity and introduction of new products in the capital market, encouraging and facilitating the widening and broadening of issuer base, facilitating widening and broadening of the investor base, and enhancing SEC’s performance through effective alignment and management of human, information, and financial capital,” Sugathadasa further outlined.

http://www.thebottomline.lk/2011/06/26/page4.html

Look like an expensive sophisticated system