With the impending demutualisation of the Colombo Stock Exchange (CSE), three investors from Europe have expressed interest in a strategic stake in the entity after the demutualisation process.
The 15-member stockbroking firms have got a detailed report done with the help of the IFC on the demutualisation of the CSE and after the Demutualisation Act should be passed by the Parliament, after which, the CSE as a company limited by guarantee, will be converted to a company limited by shares. Demutualisation of an exchange segregates ownership and management from trading rights of the members of an exchange. In due course, the demutualised stock exchange itself may be listed, and its shares traded on the stock exchange.
Capital market officials told the Business Times recently that the process of demutualisation has reached finality, and it will be a matter of time before the stock exchange is demutualised. They said the fact that certain investors are interested in the CSE shows its potential.
The CSE is the only major exchange in South Asia that remains un-demutualised. Demutualisation of exchanges has been a key global trend and 13 of the 23 markets in the MSCI Emerging Market Index (EMI) have been demutualised.