Securities and Exchange Commission of Sri Lanka Act 2021 · As enacted · Part II · Markets and Market Institutions
57. Cancellation of a licence of a central depository
Official English translation. The Sinhala text prevails. Open the official Sinhala text, official PDF on documents.gov.lk
Official translationFrom Department of Government Printing, unchanged
The Commission may by notice in writing -
cancel the licence granted under section 55 with effect from the date specified in the notice; or
direct the central depository to cease to provide or operate such facilities, or to cease to provide such services, as are specified in the notice, with effect from the date specified in the notice.
The Commission shall not cancel a licence or issue a directive under subsection (1), unless the Commission is satisfied that it is appropriate to do so for the protection of investors or in the public interest or for the proper regulation of the securities market where any of the following circumstances occur: -
the central depository ceases to operate a system for the central handling of securities;
the central depository is being wound up or otherwise dissolved, whether within or outside Sri
Lanka;
the central depository has contravened any term or condition of its licence or is charged with any offence under this Act;
the central depository has failed to comply with a condition, requirement or directive that is issued under this Act;
any information provided for the purposes of section 55 was false or misleading in a material particular or from which there is a material omission;
a judgment debt against the central depository has not been satisfied in whole or in part;
a receiver, a receiver and manager, liquidator or an equivalent person has been appointed, whether within or outside Sri Lanka, in relation to or in respect of any property of the central depository;
the central depository has, whether within or outside
Sri Lanka, entered into a compromise or scheme of arrangement with its creditors; or
the central depository has on its own accord applied to the Commission to cancel the licence granted to it and the Commission, thinks it fit to do so.
For the purposes of paragraph (a) of subsection (2), the central depository shall be deemed to have ceased to operate a system for the central handling of securities if it has ceased to operate such system for a period exceeding two weeks without obtaining the prior written approval of the Commission.
Notwithstanding the cancellation of a licence or the issuance of a directive under subsection (1), the Commission may permit the central depository to continue, on or after the date on which the cancellation or directive is to take effect, to carry on such activities affected by the cancellation or directive as the Commission may specify in the notice–
for the purpose of closing down the operations of the central depository or ceasing to provide the services specified in the notice;
for the purpose of protecting the depositors; or
in the public interest.
Where the Commission acts under subsection (1), the
Commission may where it deems necessary appoint an interim board of directors for a period of six months and be extended for a period of one year to manage the affairs of the central depository until a new board of directors is appointed.
Where the Commission has granted permission to the central depository under subsection (4), the central depository shall not, by reason of its carrying on the activities in accordance with the permission, be regarded as having contravened subsection (1).
The Commission shall not take any action under subsection (1) without giving the central depository an opportunity of being heard.
A central depository which is aggrieved by the decision of the Commission made under subsection (1) may, within fourteen days after the central depository is notified of the decision, appeal to the Minister.
Notwithstanding the making of an appeal under subsection (8), any action taken by the Commission under this section shall continue to have effect pending the decision of the Minister.
The Minister may, on an appeal made under subsection (8)-
allow the appeal and direct the Commission to revoke the cancellation of the licence or the directive; or
disallow the appeal.
The Commission shall give effect to the decision of the Minister.
Subject to subsection (11), the Commission shall give public notice of any cancellation of the licence or any directive issued under this section.
Part III
Issue of Securities
Part IV
Trade In Unlisted Securities
Part V
Market Misconduct
Part VI
Finance
Part VII