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Explanation: The Securities and Exchange Commission of Sri Lanka Act, No. 19 of 2021 was certified on September 21, 2021, and came into operation on September 24, 2021. It repealed and replaced the previous Securities and Exchange Commission of Sri Lanka Act, No. 36 of 1987. The Companies Act of 2007 and Banking Act of 1988 govern corporate affairs and commercial banks respectively.

Explanation: Under Section 5 of the SEC Act No. 19 of 2021 the Commission consists of 10 members in total: 6 appointed members (appointed by the Minister, of whom at least 5 are from the private sector), and 4 others comprising a Deputy Secretary to the Treasury, a Deputy Governor of the Central Bank, the Registrar-General of Companies, and the President of the Institute of Chartered Accountants of Sri Lanka. This structure ensures representation from key regulatory and professional fields.

Explanation: Under Section 5(1) of the SEC Act No. 19 of 2021, the Registrar-General of Companies and the President of the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) are the two ex-officio members. The Governor of the Central Bank is not a member, though a Deputy Governor nominated by the Monetary Board serves as a nominated member. The Director General is an employee of the Commission, not a Commission member.

Explanation: Under the enforcement provisions of the Securities and Exchange Commission of Sri Lanka Act, No. 19 of 2021, an individual convicted of a market offence (such as insider dealing or market manipulation) is liable to a fine of not less than ten million rupees (Rs. 10 million), or to imprisonment for a term not exceeding ten years, or to both. This is a significant increase over the penalties under the repealed 1987 Act.

Explanation: Under the SEC Act No. 19 of 2021, 'Market Institutions' are defined as an Exchange, a Clearing House, or a Central Depository. Stockbrokers, investment managers, and margin providers are classified as 'Market Intermediaries' under the Act and are licensed separately from Market Institutions.

Explanation: Section 5 of the SEC Act No. 19 of 2021 stipulates that the Minister shall appoint six members with professional standing in finance, law, accounting, or business, and at least five of these appointed members must be from the private sector. This ensures that the Commission incorporates hands-on market experience alongside public sector oversight.

Explanation: The Chairman of the Commission is nominated by the Minister of Finance from among the appointed members of the Commission. The Minister holds the administrative power over the appointments of the six appointed members and the nomination of the Chairman.

Explanation: Insider trading is prohibited under Part V of the SEC Act No. 19 of 2021. It occurs when a person trades in securities of a listed company while possessing material information that is not generally available to the public and, if it were, would be likely to materially affect the price of those securities.

Explanation: Part V of the SEC Act No. 19 of 2021 contains robust whistleblower protection provisions. Any person who reports in good faith any breach of the Act, regulations, or rules to the SEC is protected from dismissal, harassment, or retaliation by their employer, and is granted immunity from civil or criminal action for disclosing the information.

Explanation: Market rigging involves transactions where there is no genuine change in beneficial ownership (wash sales) or matching buy and sell orders (matched orders) executed with the intent of creating a false or misleading appearance of active trading or price movement. This is a prohibited form of market manipulation under Section 128.