Curfew or not, CSE to stay open
By The Sunday Morning Business
The newly digitalised Colombo Stock Exchange (CSE) is set to remain open for trading regardless of whether or not the Government opts for an islandwide curfew, quite unlike the lockdown period following the first Covid-19 outbreak in Sri Lanka when the country was kept closed for a staggering seven weeks.
Speaking on behalf of the regulator of the CSE, Securities and Exchange Commission (SEC) Director of External Relations and Surveillance Tushara Jayaratne told The Sunday Morning Business that the recent digitalisation that was carried out at the CSE rules out the need for a market closure.
“There will certainly not be a closure of the market this time. With the digitalisation, a Central Depository System (CDS) can be opened from your mobile without having to visit the CSE. Customers will get all the required information and verification through e-mails. During the lockdown in March, we had issues as our platform was not digitalised,” Jayaratne stated.
According to Jayaratne, payment settlement was rendered impossible during the previous occasion, which necessitated the market closure, but digitalisation has addressed this issue too. The digitalised platform requires CDS account holders to provide their bank details to make sure that settlement would be done even during a curfew as the banking sector remained active even during the previous lockdown.
“We gave maximum publicity for this digitalised platform. There are about 800,000 CDS accounts. Most of the active account holders have already provided their email addresses and account numbers. They cannot trade if they have not provided these details,” he added.
Meanwhile, CSE Chairman Dumith Fernando too told us that the necessary infrastructure and systems are in place to ensure the market remains operational during a possible curfew.
“The CSE conducted business continuity exercises to ensure we are able to operate the market remotely. The CSE and the stock broker firms are satisfied with the outcome of these exercises and the robustness of the systems to continue uninterrupted stock market operations,” Fernando stated.
On 17 September, CSE became digitalised with the conversion of paper-based statements to electronic forms to facilitate companies listed on the CSE to pay dividends electronically to shareholders. Furthermore, the CSE launched a new CSE mobile app for end-to-end digital onboarding and online account opening that removes the barriers to entry for new investors, enabling any eligible prospective investor around the country to open a CDS account to trade in the market without the need to visit a branch office.
The digitalisation also featured the revamp of CSE and SEC digital touch points including new CSE, SEC, and CDS websites that were re-launched with “user-friendly” interfaces to offer users an informative browsing experience covering trading information, regulatory information, as well as investor-centric information maintained by the CDS.
With the new online account opening feature offered by the CSE mobile app, prospective investors can begin investing instantly with their account opening, trading, and settlement, and monitor their accounts remotely.
The CSE was closed from 20 March to 10 May mainly due to the inability of being physically present at the CSE to undertake usual operations as well as due to restricted mobility, according to the CSE. Nevertheless, the seven-week-long market closure created uncertainties amongst the investors, particularly among foreign investors who were unhappy that they were being prevented from pulling out their investments in a volatile market situation.