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As enacted
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Contents

Part II · Markets and Market Institutions

27. Duties of an exchange

Official English translation. The Sinhala text prevails. Open the official Sinhala text, official PDF on documents.gov.lk

(1)

It shall be the duty of an exchange to ensure, an orderly and fair market in securities that are traded through its facilities.

(2)

In performing its duty under subsection (1), the exchange shall-

(a)

act in the public interest having particular regard to the need for the protection of investors;

(b)

ensure that where any interest that is required to be served under any law relating to companies conflict with the interest referred to in paragraph (a), the interest referred to in paragraph (a) shall prevail;

and

(c)

manage any risks associated with its business and operations prudently.

(3)

Notwithstanding the provisions of any other law, a director of an exchange has a duty to act at all times in the public interest having particular regard to the need to protect investors and where there is a conflict between the duty under this Act and a director’s duty under any other law, the duty under this Act shall prevail.

(4)

It shall be the duty of the exchange to take appropriate action as may be provided for under its rules for the purpose of monitoring or securing compliance with its rules.

(5)

An exchange shall immediately notify the

Commission if it becomes aware of -

(a)

any matter which adversely affects, or is likely to adversely affect the ability of any trading participant to meet its obligations in respect of its licensed business, including the ability of any trading participant to comply with the minimum financial requirements as may be specified under this Act or regulations, rules or directives made thereunder; or

(b)

any irregularity, breach of any provision of this

Act, regulations, rules, directives or any other matter which, in the opinion of the exchange, indicates or may indicate that the financial standing or financial integrity of any trading participant or of the chief executive officer or directors or the key management personnel of the trading participant in question may reasonably be affected.

(6)

Where an exchange issues a warning, imposes a penalty, suspends, expels or imposes any other disciplinary measure against any of its trading participants, on the occurrence of activities referred to in subsection (5), it shall, within seven days, give to the Commission in writing the following particulars :-

(a)

the name and address of the business of the trading participant;

(b)

the reason for and the nature of the action taken;

(c)

the period of suspension and the quantum of the penalty, if any; and

(d)

any other disciplinary measure taken.

Read on from s 28

Part III

Issue of Securities

Read on from Part III

Part IV

Trade In Unlisted Securities

Read on from Part IV

Part V

Market Misconduct

Read on from Part V

Part VI

Finance

Read on from Part VI

Part VII

General

Read on from Part VII