- 6 proposals under review for proposed commodity derivatives exchange
- Evaluation process expected to conclude in about 2 months
- Technical know-how limited
The Securities and Exchange Commission of Sri Lanka (SEC) has revealed that it requires additional time to analyse the six proposals received for establishing the proposed commodity derivatives exchange in Sri Lanka.
Speaking to The Sunday Morning Business, SEC Deputy Director General Tushara Jayaratne stated that six proposals had been received from parties interested in establishing a multi-asset class derivatives exchange in the country.
He added that these proposals were still under evaluation.
Last year, speaking to The Sunday Morning Business, SEC Chairman Senior Professor Hareendra Dissabandara expressed hope that the evaluation process would be completed within approximately two months.
However, Jayaratne pointed out that the novelty of such a derivatives exchange in Sri Lanka, coupled with limited local technical expertise, meant that it required more time for a comprehensive analysis of the proposals.
“To evaluate properly, the technical know-how in Sri Lanka is very limited. Therefore, we have to engage consultants to carry out the process, so it might take some time,” he stated.
Accordingly, he declined to provide a specific timeline for the completion of the evaluation process.
It has been reported that the six proposals received by the SEC include a submission by the Colombo Stock Exchange (CSE) in collaboration with India’s National Commodity and Derivatives Exchange (NCDEX).
Similarly, speaking to The Sunday Morning Business, CSE Executive Vice President – Marketing Niroshan Wijesundere confirmed that they had submitted a proposal and, to the best of his knowledge, the SEC was still evaluating the submissions.
He noted that additionally, they were continuing to explore the possibility of relocating the Multi-Currency Board (MCB) to Port City Colombo.
“We are still in discussions with the SEC and the Central Bank of Sri Lanka regarding the regulations. We are actively working on it,” he stated.
In 2021, the CSE announced via a press release that it had signed a Memorandum of Understanding with CHEC Port City Colombo to establish an international multi-currency exchange within Port City Colombo.
This initiative was intended to serve as a gateway for both regional and global investors, while also providing a platform for Sri Lankan and overseas corporates to issue foreign currency bonds and equities, in addition to developing other financing and risk management instruments.