SRI LANKA: SEC and CSE Complete Third Phase of Digitalization Initiative and Announce Plans for CCP

Friday September 2 2022

The Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE) completed the third phase of the Digitalization Initiative of the Sri Lankan stock market and announced the plans for Central Counterparty System (CCP).

A joint committee was formed by the Chairman of the SEC, with the objective of identifying measures and mechanisms required for the Colombo Stock Market to conduct its core activities digitally. The committee comprised representatives from the SEC and the CSE and has worked towards converting paper-based statements to electronic forms. The committee launched a transformative digital offering through the CSE Mobile App, an end-to-end digital onboarding and online account opening feature. In the third phase, the committee explored avenues to bring in investments from retail investors living outside of Sri Lanka. The committee developed infrastructure to offer convenient registration and investment opportunities to these foreign investors. Fourteen new features were also introduced as part of the third phase of Digitalization.

Mentioning the developments of a Central Counter Party System (CCP) and continue to broad base the capital market, it is needed to ensure that the overall systematic risk in the market is managed, and to do that, need to manage and minimise the risk of default by buyers and sellers, and a CCP is the mechanism to do this effectively. A central counterparty system can offer significant benefits to the market.

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