📈 Deep Dive: Market Manipulation Rules & CSE Integrity

• Market Overview: Stock market capitalisation stood at 19.7% of nominal GDP in 2024, showing equities as a modest yet vital national financial component. Average stock market returns between 2023 and 2025 reached ~39%, providing key diversification alongside unit trusts and debentures. • Regulatory Framework: The Securities and Exchange Commission of Sri Lanka (SEC) Act No. 19 of 2021 mandates fair, orderly, and efficient market operations. Part V (Sections 128 to 132) explicitly criminalises market manipulation to build investor confidence and safeguard capital formation. • Forms of Market Manipulation: • Action-based: Transactions intended to distort prices/volumes. • Information-based: Disseminating false or misleading statements. • Trade-based: Excessive/coordinated trading to force price movements. • Enforcement & Compliance: The Act draws on regional precedents (Malaysia & Singapore). CSE Listing rules require immediate disclosures of price-sensitive events (mergers, board changes, major transactions) under Annexure 8A to enforce transparency and protect market integrity.