Colombo bourse DvP roll out next month
The Delivery versus Payment (DvP) on the Colombo bourse will be launched next month — which was talked about for over two decades and will essentially wipe out the settlement risk in a share trade, officials said.
When this system kicks in, a buyer’s cash payment for shares must be made before or at the same time as their delivery of the shares. This system is a big part of building trust with foreign clients, according to the officials.
The Colombo Stock Exchange (CSE) board has approved the relevant rules for the DvP and the Securities and Exchange Commission (SEC) has sanctioned them at the last commission meeting. The test run was successful and it’s ready to be launched, the officials said.
Amongst the many efforts in broad-basing the capital market the SEC has in principle sanctioned to include telco operators to introduce share trading in their platforms in a bid to give a wide choice for investors.
Viraj Dayaratne, Chairman SEC told the Business Times recently in an interview that it will be groundbreaking to take this initiative forward. The telco subscribers will need to prefund the trades. The framework is still being developed by the CSE.
More than 90 per cent of the new CDS accounts have been opened via the new mobile app launched last September and this has made it easier for enabling such platforms.
The existing mobile app will be further improved to make it more user-friendly by making the app available in three languages and including other macro-economic indicators to the app to enable carrying out detailed analysis.
“We are contemplating providing a seamless trading and settlement experience for all stakeholders which would enable the market to be on par with other developed markets,” Mr. Dayaratne said.