The government appointed the head of Sri Lanka's state run tourism board, Nalaka Godahewa, to chair the country's markets regulator, the Treasury Secretary said today.
P.B. Jayasundera said Godahewa would join the Securities and Exchange Commission with immediate effect.
The SEC post has been vacant since August 17 when Tilak Karunaratne resigned, claiming he had come under pressure from market participants being investigated for alleged stock market manipulation.
The IMF last week raised concerns over the resignation of Karunaratne, saying that, under his leadership, the SEC had been taking the right steps to ensure its regulations were obeyed.
Godahewa, meanwhile, has been viewed as a market friendly candidate, and hopes he would succeed to the top regulatory post had boosted the stock market 4.1 percent since Karunaratne's resignation.
Godahewa has worked extensively in the private sector, including as the head of an insurance firm and of the overseas operations of the island's top garment exporter, MAS Holdings.
Godahewa, who will be the third SEC head since December, said he was unaware of the appointment.
Sri Lanka's SEC has been heavily criticized by some market players, who have claimed the stock exchange is over regulated and blamed this for a 20 percent drop in the index this year.
Karunaratne's predecessor also left amid complaints from brokers that tougher regulations were hurting stock prices.
Analysts and brokers are divided over Karunaratne's resignation with some noting regulations will be difficult to enforce even under a new SEC chief as investors were powerful enough to lobby against any probes.
Karunaratne had been pushing investigations into stock market malpractice, including so called pump and dump deals in which investors are lured into apparently cut price equities.
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