Sri Lanka SEC to Procure New Surveillance System

​The SEC is planning to hire a consultant to assess its existing surveillance system and make recommendations on procuring a new system.

Sri Lanka’s SEC (Securities and Exchange Commission) is in the process of procuring a new surveillance system using World Bank funding, officials have said.

The system is expected to feature a flexible workflow supported by data analytics and visualisation tools geared to spotting market abuse and generating advanced alerts. The SEC is seeking to monitor the market in real-time using an automated surveillance system to detect and prevent securities law violations.

“We are planning to hire a consultant to assess the system and make recommendations on procuring a brand new system,” SEC chairman Viraj Dayaratna told Regulation Asia.

Surveillance is seen as a tool for the SEC to preserve investor confidence in the capital market by inhibiting market abuse, including possible offences such as insider trading, market manipulation and front running.

Where suspected breaches of the law have been spotted, action is initiated by a surveillance referral to the Surveillance and Investigations Committee of the SEC. Suspicious transactions of connected parties are followed up in a watch list and scrutinised closely.

During the year 2019, 11 surveillance referrals to the SEC were made, comprising of seven possible cases of insider dealing, four possible cases of market manipulation and other market malpractices. There were also instances where referrals involved more than one offence category.