Especially its section 130 has seen them playing on the back foot this week as it specifically deals in falls and/or misleading statements. “This section prohibits making statements or disseminating information which is false or misleading and likely to raise, lower, maintain or stabilise price or volume of securities traded without reasonable care concerning the accuracy and with the knowledge that the information is false or misleading. One must be careful from now on at least, not to make comments or forecast on stocks, companies, activities or individuals, good or bad, without 200 percent knowing what you talk is right and not misleading,” a trader pointed out adding that the punishment for flouting this is 10-year jail term or Rs. 10 million or both. Unlike earlier, the SEC cannot compound offences, he added.
On Wednesday certain traders didn’t forget to mention that ‘it is not a buy recommendation’ in their tweets. However, they were promoting certain stocks claiming it was not financial advice.
The long-overdue law is more futuristic and considers how the local capital market will evolve with the intended Port City kicking into place. Now new products and new investment options which are essential to increase the liquidity and attract sizeable foreign investments are enabled with new avenues to raise funds and finance businesses.
The instances where the SEC Commission can take civil proceedings against wrongdoers have been specifically stated thereby spelling out how the Commission can use its discretion. Also, the defences available to a person accused of wrongdoing are spelled out in the law, which wasn’t there in the earlier Act.
SEC Act has section on ‘misleading information’ | Print Edition - The Sunday Times, Sri Lanka