H.D.H Senewiratne (hsenewiratne@yahoo.com)
The Colombo Stock Exchange (CSE) will introduce a new Delivery Versus Payment System, which will help to settle the front and back office brokering community and enable to improve the equity market in the country.
The CSE will expeditiously implement the Central Counter Party System and the Delivery Versus Payment System encouraging more companies to list on the CSE, CSE Marketing Head Niroshan Wijesundera told Daily News Business.
He said that system will be placed soon since a relevant consultancy firm will be informed during this month. The expression of interest was called by the Central Bank of Sri Lanka along with the Securities and Exchange Commission (SEC) and the CSE to select a suitable consultancy firm for this purpose.
The Central Counter Party system was to ensure the protection of investors in the event of a trade default when the purchasing party does not pay and a pool of funds will be created towards that, CSE sources said.
"This is good for the investors and not for the manipulators. We can expect more foreign investments and a very disciplined and professional marketing behaviour," Head of Sales Softlogic Stockbrokers Eardly Kern said. He said the implementation of the Delivery Versus Payment System will help to enhance foreign investor confidence to a higher level. With the introduction of the Clearing House the market could introduce derivatives, futures and other instruments to the market.
He said the payment is made in sharp contrast to the present system where the shares are transferred immediately to the buyer and payment made after three working days, which has a high default rate.
Kern also said that under this system a clearing corporation will be established to facilitate this system and help to increase the foreign investor confidence level due to the default risk factor in trading.
www.dailynews.lk
The Colombo Stock Exchange (CSE) will introduce a new Delivery Versus Payment System, which will help to settle the front and back office brokering community and enable to improve the equity market in the country.
The CSE will expeditiously implement the Central Counter Party System and the Delivery Versus Payment System encouraging more companies to list on the CSE, CSE Marketing Head Niroshan Wijesundera told Daily News Business.
He said that system will be placed soon since a relevant consultancy firm will be informed during this month. The expression of interest was called by the Central Bank of Sri Lanka along with the Securities and Exchange Commission (SEC) and the CSE to select a suitable consultancy firm for this purpose.
The Central Counter Party system was to ensure the protection of investors in the event of a trade default when the purchasing party does not pay and a pool of funds will be created towards that, CSE sources said.
"This is good for the investors and not for the manipulators. We can expect more foreign investments and a very disciplined and professional marketing behaviour," Head of Sales Softlogic Stockbrokers Eardly Kern said. He said the implementation of the Delivery Versus Payment System will help to enhance foreign investor confidence to a higher level. With the introduction of the Clearing House the market could introduce derivatives, futures and other instruments to the market.
He said the payment is made in sharp contrast to the present system where the shares are transferred immediately to the buyer and payment made after three working days, which has a high default rate.
Kern also said that under this system a clearing corporation will be established to facilitate this system and help to increase the foreign investor confidence level due to the default risk factor in trading.
www.dailynews.lk
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