New regulations for Finance Companies

The Central Bank of Sri Lanka has prepared an exposure draft on corporate governance for registered finance companies having considered the views expressed by the Finance Houses Association of Sri Lanka and registered finance companies on the earlier distributed draft Code of Corporate Governance. The exposure draft is released to solicit comments, views and suggestions from the stakeholders of registered finance companies and the interested public.
The exposure draft, which is based on the direction issued to licensed banks on corporate governance, is organised under ten subheadings dealing with the responsibilities of the board of directors, meetings of the board, composition of the board, criteria to assess the fitness and propriety of directors, management functions delegated by the board, the chairman and the chief executive officer, board appointed committees, related party transactions, disclosures and transitional provisions.

The final date for receiving comments, views and suggestions is 15.08.2008. A revised draft will be made available after considering the comments, views and suggestions.

The exposure draft is expected to be issued as a direction to the registered finance companies from 01.01.2009 onwards. The direction is expected to strengthen the corporate governance practices in registered finance companies.