CSE to finalise Central Counterparty model by end May
The Colombo Stock Exchange ( CSE) will finalise its financial transaction facilitator mechanism, the Central Counterparty’s ( CCP) model and the final structure by month end, officials said.
Rajeeva Bandaranayake, CSE CEO told the Business Times that once this is done, they intend to consult all stakeholders and obtain their consensus and implement it. "This is the first time this has progressed this far," he said. "The new CDS will have better features enabling us to give better service to its customers,” he said.
The CCP inserts itself between counterparties to financial contracts traded in one or more markets ( becoming the buyer to every seller and the seller to every buyer) and this will fast-track the demutualisation ( the process through which a member- owned company becomes shareholderowned) of the CSE. "A CCP has the potential to reduce signifi- cant risks to market participants by imposing more robust risk controls on all participants and to enhance the liquidity of the markets it serves, because it tends to reduce risks to participants and, in many cases, because it facilitates anonymous trading," Mr. Bandaranayake added. He said that the South Asian Investment Conference ( SAIC) organised by the CSE in association with the South Asian Federation of Exchanges (SAFE) on Monday saw many bilateral ties formed between regional ex- changes.
“There was a lot of networking by participating exchanges,” he said, adding that CSE's Central Depository System ( CDS) had an undertaking with its Indian counterpart on related areas. “We are also getting into a similar partnership with the Maldives,” he said, adding that that SAFE is encouraging a regional index and they are mooting an idea of a regional fund. An SEC source said that an IT-BPO board that was under discussion by stockholders and the regulators is making progress. “Some of us are discussing on how to value the IT and Business Process Outsourcing (BPO) firms which plan to go public," the source told the Business Times.
He said that the Sri Lanka Association for Software and Service Companies ( SLAASCOM) is in talks with CSE and the Securities and Exchange Commission pertaining to the best options for taking IT companies public.
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