JKSB Company Profile

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The Company profile of John Keells Stock Brokers Pvt Ltd

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JKSB Company Profile

  1. 1. This is a painting of Colombo by the famous Australian artist Donald Friend. It depicts thecity as it stood several decades ago as the centre of trade and commerce. The busy harbour, theGalle Face Green, parts of the Colombo Fort and several grand old buildings which are etchedin detail are landmarks of Colombo even today. The artist lived in Sri Lanka, then called Ceylon,from 1957-1961 and is considered to be among the most important artists of the 20th century.The painting was commissioned by Mackinnon Mackenzie of Ceylon Ltd. and became a propertyof the Keells Group with the acquisition of the Mackinnons Group in 1974.
  2. 2. Standing tall,sturdy and strong John Keells Stock Brokers (Private) Limited, firmly rooted in the blue-chip conglomerate John Keells Holdings PLC, has grown from strength to strength over the years. Experience and expertise has helped the company make its mark in the stock broking field, and JKSB now boasts a large and balanced client base with an equal mix of foreign, institutional and retail investors.03
  3. 3. The companyJohn Keells Stock Brokers, has consistently risen above its competitors as a result of its reputationand strength, and currently enjoys the position of being one of the leading brokerage houses inSri Lanka. The company’s business activities span the areas of Equity Brokerage and FinancialAdvisory. We also work closely with JK Capital in building deal flow and undertaking equityplacements on investment banking transactions. The companies are subsidiaries of John KeellsHoldings PLC (JKH), the largest listed conglomerate in the country with AAA (Sri) Rating fromFitch Ratings.With years of experience in the equity dealing field, JKSB has developed a large and balancedclient base of foreign, institutional and retail investors. Active participation in the growth of thecountry’s equity market for a substantial period of time has enabled the company to sustain anetwork of key players in the country’s capital market.The company has the distinction of handling a number of the largest and most significanttransactions recorded in the history of the Colombo Stock Exchange. Its senior managementhas an average of 15 years of experience in equity trading. The sales team’s ability to work closelywith clients and its placement and order sourcing capability are unmatched in the industry.John Keells Stock Brokers is supported by a comprehensive research unit which offers country,sector and company specific data along with other value added services. JKSB has cultivatedstrong ties with all custodian banks in the country. The company also provides clients withonline trading and market watch facilities.JKSB is poised to strengthen its scope and service even further in the future. 04
  4. 4. An overview of theSri Lanka Stock Market Trading is led by the Colombo Stock Exchange which is the sole authorized Stock Exchange in Sri Lanka. Moreover, there are several bodies that work alongside JKSB to ensure that all transactions take place in a smooth and systematic manner. They focus on areas such as legislation affecting the stock market, protecting the interests of investors, promoting professional standards and monitoring the development of capital markets, clearing, settlement and registration.05
  5. 5. An Introduction to theSri Lanka Stock MarketThe Colombo Stock Exchange (CSE)The Colombo Stock Exchange (CSE) is a company established under the Companies Act No.17of 1982. It is licensed by the Securities & Exchange Commission of Sri Lanka and is the onlyauthorized Stock Exchange in Sri Lanka.The Board of Directors is the main policymaking body of the Exchange. The Board appointssub-committees and delegates power to formulate recommendations on day-to-day operations.The sub-committees are Capital Issues, Rules & By-Laws, Disciplinary & Arbitration, Research& Development, Finance and Listings.The Central Depository System (Pvt) Ltd. (CDS)The Central Depository System (CDS) is a wholly owned subsidiary of the Colombo StockExchange (CSE) and is incharge of clearing, settlement and registration.Its functions are fully automated and act as a depository to hold shares in trust for shareholdersof listed companies. 28 stockbroking firms and 16 commercial banks provide custodial servicesfor investors.Custodian Banks have been granted participatory status, enabling them to utilize the facilitiesand services offered by the CDS directly.As a participant, the custodian maintains all securities with the CDS in the client’s name. Mostcustodian banks have tie-line facilities to the depository, enabling real-time information on theirclient’s share portfolios.All physical scrips must be lodged with the Central Depository System prior to trading. TheCentral Depository System updates its records and dispatches the scrips to the respectivecompany secretaries by the next working day. The Central Depository System maintains allsecurities accounts. Shareholders receive a statement of their holdings at each month’s end.Custodian banks receive a statement of holdings of their clients on a weekly basis. 06
  6. 6. The Securities & Exchange Commission of Sri LankaIn September 1987, the government established the SEC, a statutory body responsible forregulating capital markets, including the stock market. The Commission’s role is to protect theinterests of investors, to promote professional standards and to advise the government on thedevelopment of capital markets.The SEC regulates and governs the CSE. The body has the authority to determine requirementsfor new listings and the power to investigate misconduct in the market and to refer cases to theAttorney General for prosecution.LegislationThe 1987 Securities and Exchange Commission Act, which set up the regulatory body, is themain legislation affecting the stock market.Investment RestrictionsForeign investment is encouraged and investment in companies listed on the ColomboStock Exchange is largely unrestricted. Share purchases must be settled through a SIERA(Share Investment External Rupee Account). There are neither restrictions nor limitations on therepatriation of funds through a SIERA.Equity holdings in banks are restricted to 10% which can be extended to 15% with the approvalof the monetary board. In addition, foreign ownership in plantations is limited to a maximumof 40%.On acquiring 10% of the equity of a company, a shareholder must inform the Stock Exchange inwriting, with the next level of disclosure coming at the threshold of 20%. On acquiring 30%of the equity of a company, it is mandatory for the shareholder to make an offer for the balanceshares as per the Takeovers and Mergers Code of 1995.Investor ProtectionA Settlement Guarantee Fund (SGF) was established in 1998. The government has contributedSri Lankan Rs.150 million towards the SGF, which guarantees trade settlement between clearingmembers of the CDS and the investors. In addition, there is a Compensation Fund maintainedby the Securities & Exchange Commission of Sri Lanka to make good any broker defaults. 07
  7. 7. Trading EnvironmentTrading on the Colombo Stock Exchange is fully automated. Transactions take place on ascripless basis on-line between stockbrokers where client orders are matched electronically.At present, equities, corporate debt instruments and the beneficial interest in GovernmentSecurities are traded on the Stock Exchange. Physical instruments such as shares in certificateform cannot be traded. Trading is permitted only after the physical instruments aredematerialized with the CDS.Investors may maintain securities accounts with more than one stockbroker or custodian bank.Investors may place their orders with a stockbroker by phone, email, fax, Bloomberg terminalor by personally visiting the broker’s office. Upon entering the orders, they are electronicallytransmitted to the CSE’s database of pending transactions.Clients are required to settle the value of a purchase by T+3 (trade date + three market days).For a sale, clients will receive the sale proceeds from the broker/custodian bank on T+3.Trade settlements by Foreign Funds, Corporates and Individuals: At the time of purchase,settlement made in foreign currency would be converted to local currency on the settlement dateand forwarded to the local brokerage against the purchase. In the event of a sale on the settlementdate the local brokerage would forward local currency to the respective customer’s bank.As per a SEC Directive, it is mandatory to recover outstanding debtors as at T+5 by force sellingof securities.Withholding TaxIn most cases a withholding tax of 10% is deducted at source from dividend income forall shareholders. 08
  8. 8. Venture with us Backed by our expertise and in-depth knowledge of the share market in Sri Lanka, John Keells Stock Brokers (Private) Limited is in the perfect position to advise and guide clients towards prosperity. Our portfolio of clients is impressive and now is the time to add your name to the list.09
  9. 9. Opening an Account(Information to be submitted by applicant)1.1 Client Instructions to open an account with John Keells Stock Brokers1.1.1 The Client has to submit the duly completed client account opening forms together with the relevant documents to the participant as set out below in the documents required in Section 1.21.1.2 The Client shall ensure that there is full compliance with the KYC rules of the financial intelligence unit of Sri Lanka in opening the CDS accounts with John Keells Stock Brokers.1.1.3 After reviewing the account opening documents inclusive of the relevant documents, John Keells Stock Brokers shall submit the forms in order to open the CDS account on behalf of the client.1.1.4 It is the responsibility of the Client to take all possible steps necessary to prove their identity as per FIU Regulations.1.1.5 The CDS shall reject incomplete account opening documentation, giving reasons for rejection and handing over same to the Broker.1.2 Documents required for new and existing applicants1.2.1 Resident individuals with normal identification must submit the following : • A clear photocopy of the National Identity Card (NIC). If the NIC is not available, a copy of a valid passport as at the date of the account being opened at the CDS should be submitted. 10
  10. 10. • If an existing CDS account holder registered under an NIC has lost/misplaced the NIC and is unable to submit a copy through the new participant, then the CDS shall accept a copy of a valid passport which bears the NIC number. This should be submitted together with a sworn affidavit stating that the NIC is not available. • If both the NIC and passport are not available, a copy of the driving license should be submitted together with an affidavit confirming the fact that both the NIC and passport are not available. • CDS form 1 • CDS form 1 (A) • Proof of residency document as per the rules issued by the Financial Intelligence Unit of Sri Lanka valid within the last three months • CDS form 20 applicable for DEX transactions on the Debt Securities Transaction Platform (DEX)Note: If the account is to be opened using a Power Of Attorney (POA) a copy of a valid POA is required.1.2.2 Non-resident Individuals must submit the following : • A copy of a Sri Lankan valid passport for Sri Lankan nationals or • A copy of a valid foreign passport for non-nationals • Proof of residency document as per the rules issued by the Financial Intelligence Unit of Sri Lanka • If a non-national applicant wishes to open an account giving a local correspondence address, that person should provide sufficient information regarding the correspondence address (e.g. Valid residential visa)Note: If the account is to be opened using a Power of Attorney (POA) a copy of a valid POA is required • CDS form 1 • CDS form 1 (A) • Share Investment External Rupee Account (SIERA) / Rupee Account for Non Resident Sri Lankan Investment (RANSI) account details with documentary proof (for transaction purposes). • If an existing local account holder opens a foreign individual account, CDS 1 (C) has to be submitted. 11
  11. 11. • If a resident Sri Lankan becomes a non-resident, that person would have to open a new (foreign) account. In such an instance the following documents relating to opening a foreign client account needs to be submitted. • CDS form 1 and form 1 (A) • CDS form 1 (C) Appendix 3 – III) • Proof of residency document as per the rules issued by the Financial Intelligence Unit of Sri Lanka valid within the last three months • Share Investment External Rupee Account (SIERA) / Rupee Account for Non Resident Sri Lankan Investment (RANSI) account details with documentary proof (for transaction purposes) • Copy of valid passport1.2.3 Local Companies must submit the following : • A copy of the certificate of incorporation of the company. If the company has changed its name, a copy of the certificate of name change issued by the registrar of companies is required. • A copy of the articles of association of the company • An extract of the resolution passed by the board of directors to open the CDS account. In the alternative, the company may provide certification of the relevant section in the account opening form itself (CDS form 2) • A recent dated letter from the company secretary indicating the names, addresses, NIC or passport numbers, and occupations of all existing directors. • A recent dated letter from the company secretary confirming the top shareholders (names and addresses) up to a maximum of ten shareholders. • For companies listed on the Colombo Stock Exchange, a directors list and a shareholders list is not applicable. • CDS form 2 completed by the company in accordance with the provisions of the articles of association of the company and / or the new companies act (No. 7 of 2007) of Sri Lanka. 12
  12. 12. • CDS form 2 (A) completed by the company in accordance with the provisions of the articles of association of the company and / or the new companies act (No. 7 of 2007) of Sri Lanka.Note: If an authorized person signs the CDS application form on behalf of the applicant company, then the following must be submitted: • A copy of the Power of Attorney / board resolution authorizing such person to sign on behalf of the company • A copy of the national identity card / passport of such person1.2.4 Foreign Companies must submit the following : • A copy of the incorporation of the company or equivalent document issued by the registrar of companies / applicable authority where the company is incorporated. • If the company has changed its name, a copy of the certificate of the name change issued by the registrar of companies /applicable authority where the company is incorporated • A copy of the articles of association of the company or equivalent document • A copy of the certificate of good standing issued within a period of one year by the registrar of companies /applicable authority where the company is incorporated • A certified extract of the resolution passed by the board of directors to open the CDS account. Alternatively, the company may provide certification in the relevant section in the account opening form itself (CDS form 2) • Certificate to commence business issued by the registrar of companies / applicable authority where the company is incorporated (where applicable) • A recent dated letter from the company secretary confirming the names, addresses, occupations and passport numbers of the directors of the company. • If the company is listed in a regulated stock exchange, only the names of directors and the name of stock exchange (web site reference is sufficient) should be given. If the director/s is also a company, then the following information must be provided: 13
  13. 13. • Name of the director of the company • Date of incorporation • Place of incorporation • Registered address • A recent dated letter from the company confirming the top 10 shareholders / members names and addresses. (This is not applicable if the company is listed on a stock exchange. In that event, a web site reference is sufficient.) • Where the application includes a Global Custodian and the application is forwarded through a Custodian bank, a copy of the SWIFT message or similar document issued by the Global Custodian instructing the local custodian bank to open the account on behalf of the beneficiary company should be submitted together with a declaration from the Global Custodian that a custody arrangement or agreement exists between the Global Custodian and the beneficiary. • CDS form 2 completed by the company in accordance with the provisions of the articles of association of the company. • CDS form 2 (A). • Share Investment External Rupee Account (SIERA) / Rupee Account for Non Resident Sri Lankan Investment (RANSI) account details with documentary proof (for transaction purposes).Note: If an authorized person signs the CDS application form on behalf of the applicant company, then the following must be submitted: • A certified copy of the Power of Attorney / board resolution authorizing such person to sign on behalf of the company • The copy of national identity card / passport of such person(s) should be submitted • Certification1.2.5 Funds must submit the following : • Copy of the document relating to the establishment of the fund (Prospectus, Trust Deed and other legal documents) which should contain the following : 14
  14. 14. (i) Full name of the fund (ii) Date and place of the establishment of the fund (iii) Investment objectives or purpose of the fund • Copy of the document relating to the appointment of the manager of the fund or trustees • If the fund manager/ trustee is a company i) Name of the fund manager company ii) Date of incorporation iii) Place of incorporation iv) Registered address should be given • If the fund / trustee(s) is not an incorporated entity, individual names and addresses of the persons who are responsible for the management of the fund should be given. • A copy of the letter issued by the supervisory authority of the relevant country (within a period of one year) • Where the applicant is titled in the names of the “registered Holder / Global Custodian/ Beneficiary” and forwarded through a custodian bank, a copy of the SWIFT message or similar document issued by the Global Custodian instructing the local custodian bank to open the account on behalf of the beneficiary company should be submitted together with the declaration of the Global Custodian that a custody arrangement or agreement exists between the global custodian and the beneficiary. • A copy / copies of the custody agreement(s) • Details of the beneficiaries / unit holders of the fund • CDS form 2 • CDS form 2 (A) • Share Investment External Rupee Account (SIERA) / Rupee Account for Non Resident Sri Lankan Investment (RANSI) account details with documentary proof (for transaction purposes). 15
  15. 15. CertificationAll supporting documents to be submitted to the CDS should be certified / attested /authenticated for purposes of validating by persons mentioned below. Such certification shouldstate that the document is a certified true copy.a) If the account is coming through a global custodian, documents should be certified by the custodian bank.b) By a solicitor, attorney-at-law, notary public, practicing in the country where an applicant resides. 16
  16. 16. Towards yourexpectations John Keells Stock Brokers (Private) Limited is committed to make sure you optimize your invest- ments in an ever changing market scenario. Based on our years of experience and a thorough understanding of the bigger picture, we offer you one-on-one wealth management advice with the dynamism and dedication that are the hallmark of our service.17
  17. 17. BrokerageBrokerage rates are fixed for transactions up to the value of Rs. 50 million by the Colombo Stock Exchangeand are common to all brokers. However transactions above Rs. 50 million are negotiable with aminimum brokerage fee of 0.2% being applied. Intraday trades will only have one side of the brokeragecharged. Commissions earned on trades executed via foreign brokerages shall be equally shared by theforeign and local brokerages.Given below is the break up of the fees for a purchase/sale transaction: Transactions upto Rs. 50 million Transaction Cost Brokerage Fee 0.640% Securities & Exchange Commission Fee 0.072% Colombo Stock Exchange Fee 0.084% Central Depository System Fee 0.024% Share Transaction Levy 0.300% Total 1.120% over Transactions upto Rs. 50 million Transaction Cost Minimum Brokerage Fees 0.2000% Securities & Exchange Commission Fee 0.0450% Colombo Stock Exchange Fee 0.0525% Central Depository System Fee 0.0150% Share Transaction Levy 0.3000% Minimum Total Brokerage 0.6125% 18
  18. 18. Watching outfor your interests Our team of experts is constantly studying and analyzing the market based on research and solid data. JKSB personnel have the experience to design and execute strategic plans to maximize your returns. Furthermore, all our client-company relationships are built on the firm foundation of mutual respect and trust.19
  19. 19. Key Contact PersonnelTivanka Ratnayake Akmal MashoorVice President – JKH, Asst. Vice President – JKH,Chief Executive Officer Head of SalesTel. (Mob): +94 777 420537 Tel. (Mob): + 94 777 489468 (Dir): + 94 11 4710725 (Dir): + 94 11 4710726e-mail: tivanka@jkstock.keells.com e-mail: akmal@jkstock.keells.comMs. Chryshanthi Manuel Yolan SeimonManager – Back Office Head of ResearchTel. (Mob): + 94 777 311598 Tel. (Mob): + 94 772 067512 (Dir): + 94 11 2306276 (Dir): + 94 11 2306273e-mail: chryshanthi@jkstock.keells.com e-mail: yolan@jkstock.keells.com

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