CSE Chairman Vajira Kulatilaka has told media that the Securities & Exchange Commission (SEC), the Colombo Stock Exchange (CSE) and the Central Bank of Sri Lanka (CBSL) are discussing the details to establish the Central Counterparty System with the advice of a Malaysian consultant.
The CCP is a system that is being used by most world markets to safeguard both parties in a transaction.
According to the CSE Chairman currently the CSE does not have a system to assure relief to a stockbroker/investor if he faces a problem after a transaction.
The CSE currently has a Settlement Guarantee Fund, with a Rs. 600 million capital in hand from which investors/stockbrokers could obtain relief and once a Central Counterparty System is set up, this fund would be transferred to the CCP, the CSE Chairman explained.
According to the official sources, the CSE is closely working with stockbrokers to begin risk management and back office systems. Capital market like many sectors in the country was neglected in the last couple of years due to uncertain situation prevailed in the country. Nevertheless, various plans were put in place by the CSE in personnel and institutional building, IT and Risk Management to promote capital market not only to Sri Lankans but also to foreign investors