December 2, 2014, 6:17 pm
By Sanath Nanayakkare
The Colombo Stock Exchange (CSE) yesterday launched a state-of-the-art, new generation Depository System to upgrade its Automated Trading System (ATS).
This new Central Depository System (CDS) lays the platform for future enhancements relating to post-trade Clearing and Settlement services and moving to a Delivery Verses Payment (DVP), a system of settlement and a Central Counter Party (CCP) system.
The system is a highly reliable, extensible, multi-asset class clearing, settlement and depository system built around revolutionary architecture.
It features avant-garde technology that supports multi-asset classes and caters to the overall strategic goals of the CSE to improve its trading infrastructure.
It uses technology that comprises of a three-tier architecture which ensures system robustness, flexibility and adaptability.
Dr. Nalaka Godahewa, Chairman, Securities and Exchange Commission of Sri Lanka (SEC) speaking at the event said, "This cutting-edge technology is a major step in transitioning towards a more accessible platform for the end-user, and a step forward to getting cross border listings as per our road map, which is on track.
"The SEC intends to develop the CSE to become one of the most technologically advanced modern Stock Exchanges in the world comprising of proper risk management systems and an effective Central Counter Party (CCP), he added.
The upgraded CDS system will be able to offer more efficient depository services to market participants and investors and lead to expand the investor-base and increase share ownership among the populace of Sri Lanka.
The CDS for shares and Corporate Debt in Sri Lanka was first launched in 1991 and was the first depository in South Asia and one of the first depositories globally. The 19-year-old legacy system was thus replaced as part of the CSE’s strategy for infrastructure development.
CSE Chairman Vajira Kulatilaka said, "The upgrade also brings the CSE on a par with other Asian Exchanges, by the adoption of best practices for post trade depository services. We’ll be making continued improvements to our clearing and settlement infrastructure to create an easily accessible system for our investors.
The new generation CDS has been supplied and is maintained by Millennium IT Software (Private) Limited, now part of the London Stock Exchange (LSEG) group. The platform facilitates a secure electronic environment for the safekeeping of instruments and the transfer of ownership pursuant to trading.
Mack Gill, CEO MillenniumlT said,"Sri Lanka has a success story to tell in terms of market capitalization and liquidity. With the installation of modern technology, the CSE will gain more international visibility as a vibrant stock market."
The Bell Ringing Ceremony was also officially launched during the event. This tradition is followed by many Stock Exchanges globally, to formally declare open the day’s trading. The CSE will make the bell ringing ceremony a regular feature by inviting special guests to open the day’s trading.