Connect with us

Business

CSE set to introduce delivery vs payment mechanism to stock market

Published

on

The Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE) announced the introduction of a Delivery vs Payment (DVP) system for stock market transactions. The Go Live is scheduled for 26th July 2021 subject to a final round of testing and industry wide mock runs.

The objective of introducing a DVP system for the stock market in Sri Lanka is to minimize the Asset commitment risk of sellers. Under the DVP system the physical custody of shares will be transferred to buyers only on settlement date.

Presently the delivery of shares occurs immediately upon the execution of the transaction while fund settlement takes place 3 market days after the transaction date (T+3), thus exposing the seller to a 3-day settlement risk. Although stringent measures had been introduced to reduce settlement risk and the CSE has never experienced a settlement failure, the globally accepted mechanism for minimizing settlement risk is through a DVP system where the securities and funds are exchanged simultaneously on the settlement date.

The implementation of DVP, a much needed market infrastructure enhancement, will increase the overall credibility and integrity of the Sri Lankan stock market. Furthermore, the adaptation of the DVP settlement mechanism by CSE will be an additional qualification in obtaining the emerging market classification on international market indices.

Chairman of the SEC Viraj Dayaratne, PC stated that the SEC is pleased that they were able to fast track the implementation of DVP through the facilitation of the regulatory framework. He added that DVP is a critical risk management mechanism and it will also complement the efforts in attracting more foreign investor participation in the stock market. He further added that the industry should now commence work on a Central Counterparty System (CCP).

Director General of SEC, Chinthaka Mendis, stated that he is pleased to note how the SEC was able to secure technical assistance from the World Bank and the Asian Development Bank to advise the SEC to facilitate the launch of the DVP, which is in fact the most significant milestone of the CSE since the implementation of the Automated Trading System (ATS) in 1997. He further stated that this would contribute towards upgrading the CSE status in risk assessments carried out by international bodies and will enable the Sri Lankan market to better position itself within the spectrum of foreign portfolio investments.

Chairman of the CSE, Dumith Fernando said that he is delighted to see the introduction of DVP which was a long felt need for the Sri Lankan Stock Market. He commented that this is a result of a three-year long project and is a landmark achievement for Sri Lanka’s capital market made possible by a substantial amount of planning, hard work and resource allocation on the part of all stakeholders – the CSE, SEC and the Stock Broking community. While thanking the SEC for its support in approving the DVP framework quickly, he further expressed confidence in the fact that all stakeholders, had collaborated to develop a robust DVP model which suits the local environment and will be able to mitigate the asset commitment risk

CEO of CSE, Rajeeva Bandaranaike remarked that the introduction of a DVP mechanism is a milestone development. He said that with DVP the CSE is aligning itself with global market practices and strengthening the overall credibility and integrity of the market. He further appreciated the support given by all stakeholders who have collectively contributed to enable the CSE to transition to a DVP environment.

Significant upgrades have been made to the Automated Trading System (ATS), the Central Depository System (CDS) including the development of a Risk Management and Margining System. The technology at all Stock Brokering Offices has been strengthened and upgraded to include risk management in Order Management Systems (OMS) and Broker Back Office systems (BBO).

The SEC has granted the necessary regulatory approvals for the amendments to the CDS Rules, ATS Rules, Listing Rules and Stockbroker Rules of the CSE to facilitate the implementation of the DVP Settlement Mechanism and enhanced margining model. Subsequent to the successful completion of the User Acceptance Testing (UAT) on the system changes, the CSE completed Market wide testing (Mock runs). The CSE will shortly commence the final round of Market wide testing which is due to be completed by 15th July 2021.

The Go Live of the DVP will mark a milestone in the history of share trading in Sri Lanka and pave the way to set up a Central Counter Party System (CCP), which has been a long-awaited necessity in the Sri Lankan capital market.



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Cabinet approves CECB as consultant for renovation of the Karainagar boat yard project

Published

on

By

The Cabinet of Ministers has approved the proposal presented by the Minister of Fisheries, Aquatic and Marine Resources to seek the services of the Central Engineering Consultancy Bureau as a consultant for the renovation of the Karainagar boat yard  project and allocate 40 million rupees from the Treasury for the expenditure to be borne by the Government of Sri Lanka.

[A memorandum of understanding was signed by the President during his official visit to India in December 2024. , to obtain a grant from the Government of India for the renovation of the Karainagar Boat Yard

According to the MOU, the responsibility of providing the technical consultancy service for the project and exempting the goods and equipment related to the grant from taxes has been assigned to the government of Sri Lanka.]

 

 

Continue Reading

Business

‘Transformative infrastructure’ installed at Colombo West International Terminal

Published

on

Making history: The Colombo West International Terminal

In a landmark move for Sri Lanka’s logistics landscape, EFL Project Logistics has completed a critical phase of deliveries for the Colombo West International Terminal (CWIT), a transformative infrastructure project poised to reshape the country’s role in global maritime trade.

CWIT—a collaboration between Adani Ports and SEZ Ltd (51%), John Keells Holdings and the Sri Lanka Ports Authority—is set to be the island’s first fully automated deep-water terminal. As it gears up for full commercial operations in 2025, the recent arrival of high-tech port handling equipment marks a key economic inflection point for Sri Lanka.

Speaking exclusively to The Island Financial Review on the impact, Mohamed Niyas, General Manager – Project Logistics at EFL, said, “The logistics we executed for CWIT are more than just cargo movements; they are catalysts for economic transformation. These deliveries—ranging from electric inter-terminal trucks to automated gantry cranes—are essential to positioning Sri Lanka as a sustainable, high-capacity transshipment hub.”

Among the highlights of the operation were 62 state-of-the-art Sany electric trucks and massive quay and gantry cranes, representing not only a technical leap but also a green one. These advancements contribute to CWIT’s eco-efficient design and bolster Colombo’s capacity to handle up to 15 million TEUs by 2026.

Economically, the development of CWIT—and EFL’s role in its expedited setup—signals a push for increased foreign direct investment, enhanced export competitiveness and job creation across the logistics and engineering sectors. As Niyas emphasized, “We are not just helping move cargo; we are enabling national economic value. Every successful delivery brings us closer to a future where Sri Lanka is a leading player in the South Asian maritime corridor.”

With global shipping routes evolving and automation driving next-gen port operations, CWIT is seen as a strategic asset for long-term growth. EFL’s role in the project showcases the kind of logistics innovation necessary to support this ambition—efficient, sustainable and globally competitive.

By Ifham Nizam

Continue Reading

Business

Marine Tourism Roadmap for Sri Lanka launched by SLTDA

Published

on

Dignitaries at the Roadmap launch.

Sri Lanka marked a major milestone in its tourism development efforts with the official launch of the Marine Tourism Roadmap on April 10 in Colombo. This initiative, led by the Sri Lanka Tourism Development Authority (SLTDA) with support from the Asian Development Bank (ADB) under its technical assistance program TA9881 SRI: Supporting Tourism Resilience, lays the groundwork for a new chapter in tourism and the nation’s blue economy.

The Marine Tourism Roadmap was developed through an extensive process of data collection, stakeholder consultations and site visits conducted by the ADB appointed international consultant together with officials of the SLTDA. The final validation of the Roadmap was done by the Marine Tourism Steering Committee, which included representatives from key marine related public and private sector institutions. International expertise was provided by Ms. Aleksandra Dragozet (CEO & Founder – Sea Going Green), ADB’s appointed marine tourism consultant, whose guidance ensured the strategy aligned with global best practices for sustainable tourism. The SLTDA officials, Dr. Prasad Jayasuriya, Director-Tourism Planning, Development & Investments and S Dadeepan, Assistant Director-Tourism Planning & Development coordinated all meetings, site visits and activities with relevant stakeholders and the Steering Committee.

The Marine Tourism Roadmap emphasizes a balanced approach between conservation and economic development, promoting eco-friendly activities such as diving, snorkeling, ship wreck diving and marine wildlife watching. These activities are designed to support local livelihoods while safeguarding Sri Lanka’s rich marine biodiversity, particularly coral reefs, marine mammals, and fragile coastal habitats that face increasing environmental pressure. The strategy outlines two categories of coastal destinations: areas covering Kalpitiya through Galle to Trincomalee, which possess established marine tourism industries; and areas covering Mannar, Jaffna and the North-Eastern coastal belt, which are recognized for their emerging tourism potential. Notably, Sri Lanka’s ocean territory is nearly seven times larger than its landmass, highlighting the vast, untapped opportunities for marine-based tourism. The roadmap presents both short-term and long-term implementation strategies, aiming to develop sustainable marine tourism infrastructure, enhance visitor experiences, and ensure the protection and resilience of marine ecosystems in the years ahead.

The Roadmap itself was the result of collaboration among stakeholders covering coastal areas of Negombo, Kalpitiya, Mannar, Jaffna, Mullativu, Trincomalee and Galle and also the Steering committee members representing 18 key marine related public and private sector institutions including Presidential Secretariat, Ministry of Tourism and the SLTDA. This unified approach ensured that the document reflects the diverse perspectives of stakeholders directly involved in marine and coastal tourism development.

Continue Reading

Trending