The Colombo share market will soon see Exchange Traded Funds (ETFs) by the end of the year, according to Securities and Exchange Commission (SEC) sources. ETFs are widely known as securities that track an index, a commodity or a basket of assets and trade similar to a stock on an exchange, “The SEC sent ETF regulations to be gazetted. Drafting these rules got delayed by about three months, mainly due to finalizing some areas in the regulations, but they sent it to be gazetted last week," a source told the Business Times.
He also noted that ETFs will facilitate investors to trade in certain securities such as gold certificates by year end. He added that already many are interested in ETFs and that some parties are in discussion with SEC to bring in these products. He noted that year end shall see some of them in the market. Richard Pieris Securities, one of the latest firms in the stock trade, is interested in ETFs. “We are interested in ETFs and will be looking to apply for a certain class of ETFs to the CSE,” a Richard Pieris Securities official told the Business Times.
According to the SEC source, ETFs will attract institutional investors into the Colombo market and due to their attractiveness most high networth traders will be lured into this instrument. He added that ETFs will assist traders to balance their portfolios.