By: Staff Writer

March 12, Colombo (LNW):The Securities and Exchange Commission of Sri Lanka (SEC) as part of its continuous engagement process with stakeholders in the capital market landscape, held a meeting with the CEOs of the Unit Trust industry last week.

The main purpose of the meeting was to address the current state of the Unit Trust industry and urge it to become vibrant, dynamic and attract more investors to mutual funds and Collective Investment Schemes.

SEC Chairman Faizal Salieh, Deputy Director General Tushara Jayaratne, Supervision Director Dilum Mahawatte, and other officials of the SEC participated at the meeting.

The SEC Chairman emphasised the importance of product innovation and sales promotion with attractive and relevant value propositions and urged the industry participants to invest their time and effort in that direction.

The SEC, under the Collective Investments Code 2022 (CIS Code) has introduced the regulatory framework for the operation of Exchange Traded Funds (ETFs) and Umbrella Schemes. However, the SEC is yet to receive applications from Managing Companies for the establishment of such schemes.

The Chairman urged the industry representatives to identify the interests of different investor categories, target segments and design new and relevant products that would enhance the overall attractiveness of the Unit Trust industry to the investor public.

He suggested that the Unit Trust industry introduces capital protected investment schemes where the Managing Company would be able to provide a return to their clients whilst preserving the capital.

The meeting also discussed barriers to Real Estate Investment Trusts (REITs) and what is required to be addressed in this regard to generate value for the product.

Stock Borrowing and Lending (SBL), which was introduced in November last year is restricted for Unit Trusts due to concerns related to risk management.

The SEC officials stated that the SEC will consider permitting SBL under new schemes with proper risk management controls in place.

Industry representatives discussed the issues encountered in launching US dollar denominated products and sought SEC’s assistance in resolving the issues. The SEC officials noted the concerns raised by the industry and undertook to make necessary representations to the relevant authorities.

The importance of investor education with regard to the Unit Trust industry was also emphasised.

SEC Deputy Director General Tushara Jayaratne assured that in order to support their investor awareness role, the Unit Trust industry will be given a specific opportunity to make presentations to the public during investor education programs organised by the SEC as well as the CSE.

SEC officials urged the Unit Trust Association to play an active part in promoting and developing the industry’s image, products and schemes across the industry.

The SEC Chairman stated that product innovation and creating new value propositions to the market will be considered as factors in the licensing process of Managing Companies in future.

By: Staff Writer

March 12, Colombo (LNW):The Sri Lanka Banks Association (SLBA) yesterday said the unilateral decision by the Government to suspend debt recovery via parate laws is a knee-jerk response to intense lobbying by a few individual defaulters that do not represent the wider business community.

The association noted that it will have a far-reaching negative impact on the banking sector, which functions as the heart and lifeblood of the economy.

The SLBA represents all banks licenced by the Central Bank of Sri Lanka (CBSL) including state banks, public listed companies and branch offices of international banks.

It said banks were s alarmed over state intervention to curb debt recovery laws, pointing out that there had been no consultation with the banks, and cautioning that the cost of borrowing will increase for all borrowers as a result of the Government decision.

The association members also emphasised that the suspension of parate execution will not preserve a mortgaged asset of a defaulter, as banks will continue to exercise mortgage action through the courts of law.

“The ‘parate’ execution provision is only one option available to banks in the debt recovery process, that mitigates the impact of the delays in the process,” the SLBA pointed out.

Until existing laws are amended by Parliament, banks will, where appropriate, use the parate remedy as a last resort, prior to going to court.

The process requires each individual case to be put to the banks’ boards of directors and the publication of notices in the media. It is not a process that can be implemented at the whim of any bank officer.

Bank’s deploy depositors’ funds when lending to the public, and the inability to recover money due from defaulters or extended delays in recovery, will potentially place public deposits at risk

The suspension of parate action will interrupt and stall ongoing initiatives of international agencies such as the IMF, World Bank Group, and the ADB as well as the Central Bank which are working with the banks to establish a resolution process that includes revival of distressed debt of banks by helping borrowers towards rehabilitation and preservation of residual value of such business assets

The banks have already absorbed the cost of extending relief to borrowers especially MSMEs during recent crises affecting the economy including the April 2019 terror attacks, COVID pandemic and on-going economic crisis where the parate process was suspended for as long as possible

The SLBA said its members have observed with alarm, the statements attributed to a decision made by the Cabinet of Ministers, that the debt recovery remedies available to banks, under the current laws may be amended.

By: Staff Writer

March 12, Colombo (LNW):Sri Lanka Tourism’s ambitious vision of attracting 4 million tourists by 2030, accompanied by a comprehensive National Tourism Policy aimed at holistic promotion, and sustainability has been revealed by Tourism Minister Harin Fernando.

“Sri Lanka is no longer just a destination on a bucket list; it is an experience, a connection that visitors forge with our country. It is about the positive energy and transformative experiences that compel them to return, he said

Fernando opined that Sri Lanka’s tourism industry achieved a robust revival in 2023 attracting almost 1.5 million visitors and generating a US$ 2.1 billion, showcasing its resilience after facing multiple challenges.

He also said that during the first two months of 2024 the industry has welcomed over 400,000 tourists and generated nearly $ 700 million, reflecting a positive trajectory.

As per the Minster the 360-degree marketing blitz will include various facets of advertising including digital marketing, mainstream media, Netflix, social media influencers such as Nas Daily, cooking shows and sports personalities.

Highlighting the inclusivity of Sri Lanka’s tourism strategy, Fernando noted that the country welcomes travellers from various backgrounds, ranging from backpackers to high-end tourists, with accommodation options tailored to diverse preferences.

“We have accommodation available from $ 20 home stay units to $ 14,000 villas per day to cater to the broad spectrum of visitors,” he said, adding that top international hotel brands are expanding their presence countrywide.

“ITC Ratnadipa Colombo hotel is poised to open its doors this month and it is their first project outside India. A 65 key Ritz Carlton hotel is coming up in Arugam Bay in the Eastern Province of the country, an Intercontinental Hotel will be opened soon along with home-grown Cinnamon Life opening with 800 rooms to cater to the inflow of tourists,” the Minister elaborated.

Fernando announced the launch of Marine Tourism on 31 March, a plan which he unveiled to position Sri Lanka as a premier marine tourism destination in 2024 to attract high-end travellers, particularly the ‘rich Indians’.

This initiative will feature the exploration of 143 shipwrecks dating back to World War II, offering unique experiences for visitors and divers from around the world.

Underscoring the significance of the recently approved National Tourism Policy, Fernando outlined its role in ensuring policy consistency amid regime changes. “Tourism is our lowest hanging fruit and with this policy, we aim to maintain consistency and reliability in our approach,” he stated.

The Minister also highlighted the tourism sector’s commitment to sustainability, citing initiatives such as the introduction of electric vehicle fleets for tourism, the adoption of renewable energy practices in hotels, and eco-friendly tourist activities like the Pekoe Trail.

“We will import 1,000 electric vehicles for tourism and change the famous tuk-tuks to electric ones. The tuk-tuk conversion project is supported by the Asian Development Bank (ADB),” he disclosed.

With focus on promoting responsible tourism and enhancing visitor experiences, the Minister said Sri Lanka aims to position itself as a premier destination while preserving its natural and cultural heritage for future generations.

By: Staff Writer

March 12, Colombo (LNW):Port City Colombo has marked a significant milestone today with the ground-breaking ceremony for its premier business park, the Business Centre.

CHEC Port City Colombo Ltd., said the event transcends a simple building construction – it signifies the dawn of a new era for Sri Lanka’s economic landscape.

Strategically located within close proximity to Colombo’s existing central business district, the Business Centre offers a unique commercial ecosystem for diverse businesses.

For example, the Business Centre will feature distinct zones – an IT Park and a Commercial District – all with a focus on sustainability through modern workspaces like garden offices.

CHEC Port City Colombo Ltd., said this ground-breaking is an important catalyst for Sri Lanka’s growth and for the entire region.

“This project, the largest public-private partnership in Sri Lankan history to date, underscores the government’s commitment to becoming a regional leader in technology and commerce. Join Sri Lanka towards breaking new ground – for investment, collaboration, and a brighter future,” official sources said.

The parliament of Sri Lanka recently approved a comprehensive incentives programme proposed by the Commission in consultation with the Minister of Investment Promotion, in relation to the guidelines for granting exemptions or incentives to businesses designated as Businesses of Strategic Importance (BSI).

Established under the Colombo Port City Economic Commission Act, No. 11 of 2021 (Act), the Commission aims to attract global investors, promote economic stability, and position Sri Lanka as a leader in service exports.

In accordance with the Act, the Commission identified businesses important for the success of the Colombo Port City to be designated as a BSI and recommended exemptions or incentives from the scheduled statutes of the Act.

‘To offer a competitive value proposition to potential investors, the Commission engaged with top international advisory firms such as PricewaterhouseCoopers, Ernst & Young, KPMG, and Boston Consulting Group for international benchmarking of selected factors.

These collaborations resulted in a proposed framework that establishes Colombo Port City as a globally competitive SEZ with transparent regulations and good governance principles, along with proposed sector incentives.

‘Businesses of Strategic Importance in Colombo Port City are classified into two groups: “Primary Businesses of Strategic Importance” and “Secondary Businesses of Strategic Importance”. Primary businesses involve the development of physical infrastructure of USD 100 million per land plot or USD 25 million in the Marina or Social Infrastructure.

Secondary businesses encompass sectors such as international trade, shipping logistics, banking and financial services, information technology, and tourism, among others.

‘For “Primary Businesses of Strategic Importance,” two optional incentive schemes are available. Scheme A offers exemptions or incentives from relevant enactments for 25 years, along with 50% off the prevalent corporate tax rate for 10 years after the initial 25-year period.

Scheme B provides an enhanced capital allowance of 300% on depreciable assets used within Colombo Port City, with deductions allowed for up to 40 years.