Securities and Exchange Commission of Sri Lanka Act 2021 · As enacted · Part VII · General
178. Power of the Commission to impose administrative sanctions
Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.
Official translationFrom Department of Government Printing, unchanged
Except in relation to offences under Part V, if any person –
contravenes any provision of this Act or commits a breach of any regulation or rule made thereunder;
contravenes or fails to comply with any condition or restriction of a licence or registration granted under this Act;
fails to comply with any provision of the rules of a market institution; or
fails to comply with any written notice, guideline, directive or condition imposed by the Commission, the Commission may, having regard to the nature and manner of the contravention, non-compliance or breach and the impact of such contravention, non-compliance or breach on the market referred to in paragraphs (a), (b), (c) and (d) of subsection (1), take any one or more of the following administrative actions: -
direct the person who has committed the contravention, non-compliance or breach to comply, observe, enforce or give effect to such provisions, regulations, rules, written notice, condition, directive or guideline;
impose a penalty on the person who has committed the contravention, non-compliance or breach, in proportion to the severity or gravity of the contravention, non-compliance or breach and such penalty in any event shall not exceed fifty million rupees;
reprimand the person who has committed the contravention, non-compliance or breach;
require the person who has committed the contravention, non-compliance or breach to take such steps as the Commission may direct to remedy the contravention, non-compliance or breach to mitigate the effect of such contravention, non-compliance or breach, including making restitution to any other person aggrieved by the contravention, non-compliance or breach;
in the case of a promoter or a director of a listed public company, in addition to the actions that may be taken under paragraphs (i) to (iv), the Commission may impose a moratorium on or prohibit any trading of or any dealing in, the listed public company’s securities or in any other securities which the
Commission thinks fit, by the promoter or director or any person connected with the promoter or director.
The Commission shall not take any action under subsection (1) without giving the person in contravention, non-compliance or breach an opportunity of being heard.
For the purposes of paragraph (iv) of subsection (1)
in determining whether or not restitution is to be made by a person in contravention, non-compliance or breach, the
Commission shall have regard to–
the profits that have accrued to such person in contravention, non-compliance or breach; or
whether one or more persons have suffered loss or been otherwise adversely affected as a result of the contravention, non-compliance or breach.
Where the Commission takes an action under subsection (1) against any person under the rules of a market institution the Commission shall notify the market institution of the action taken by the Commission.
Nothing in this section shall preclude the Commission from—
directing a market institution to take any disciplinary action against its trading participants, clearing members or depository participants, a listed public company and a director of a listed public company for the contravention, non-compliance or breach of the rules of the market institution including the imposition of a penalty; or
taking any other action that it is empowered to take under this Act against the person who has committed the contravention, non-compliance or breach.
Any person aggrieved by a decision made under paragraph (ii) of subsection (1) may within fourteen days of receipt of such decision may appeal to the Minister.
Notwithstanding the making of an appeal to the
Minister under paragraph (a), any administrative sanction imposed by the Commission shall continue to have effect until the Minister makes his decision.
The Minister may, on an appeal made under paragraph (a), after hearing the Commission and the person who made the appeal under paragraph (a), within a period of one month after reciept of such appeal,-
allow the appeal and mitigate the penalty;
disallow the appeal.
The Commission shall give effect to the decision of the Minister.
Where a person has failed to pay a penalty imposed by the Commission under subsection (2), the sum of money due as such penalty may, on application being made by the
Commission to the Magistrate’s court, be recovered in like manner as a fine imposed by such court, notwithstanding that such sum may exceed the amount of a fine which that court may, in the exercise of its ordinary jurisdiction impose and notwithstanding the provision of any written law to the contrary the sum so recovered shall be paid to the
Commission.
Without prejudice to any other remedy, where an administrative sanction under paragraph (iv) of subsection (1) requires the person in contravention, non-compliance or breach to make restitution in the form of monetary payment and the person in contravention, non-compliance or breach fails to restitute, on application being made by the
Commission, to the Magistrate’s court, be recovered in like manner as a fine imposed by such court, notwithstanding that such sum may exceed the amount of a fine which that court may, in the exercise of its ordinary jurisdiction impose and notwithstanding the provision of any written law to the contrary the sum so recovered shall be paid to the
Commission.
Where the monies received under subsection (1) has not been distributed due to the difficulty of ascertaining or notifying the aggrieved persons, such amount shall be–
credited to the Compensation Fund of the
Commission maintained under Part VI; or
retained by the Commission to defray the costs of regulating the securities market as the Commission may determine.