CSE invites foreign firms to be trading members

BOURSE: In a bid to attract foreign investors to the stock market the Colombo Stock Exchange (CSE) has invited applications from stock brokers and investment banks operating outside Sri Lanka to be admitted as trading members.

The CSE said yesterday that the new trading members would be permitted to transact in equity and debt securities traded on the CSE after obtaining a license from the Securities & Exchange Commission of Sri Lanka (SEC).

A CSE official said that the ability to attract foreign investors to the CSE will be a key requirement in selecting trading members from outside Sri Lanka. The CSE said that a prospective trading member must be a company incorporated in Sri Lanka with at least 75% of the equity of the company held by a stock broking company or an investment bank operating outside Sri Lanka.

The company should be a licensed or registered by a regulator in the country of operation or a holding or subsidiary company of such stock broking company or investment bank. Providing high quality research on companies listed on CSE, providing fund management, corporate finance and capital market related value added services are among other requirements from the selected companies.

The CSE at present has a membership of 15 firms. In November 2006, five new Stock Broker firms were granted Membership in the CSE, to operate as Trading Members of the Exchange, licensed to deal in both Equity and Debt securities. The CSE has been one of the best performing markets in the Asian region since 2001.

As part of the CSE’s strategy to broad base the stock market, the board of directors has taken this new initiative, the CSE said.

(CK)