Indo- Sri Lanka initiative on Derivatives

Hiran H. SENEWIRATNE in Mumbai

The high powered Sri Lankan delegation from the Securities and Exchange Commission (SEC) is expected to meet top officials from the Securities and Exchange Board of India (SEBI) and that National Stock Exchange of India (NSE) today for a collaborative effort to implement derivative initiatives in Sri Lanka.

“What we want to do first is launching of derivatives for Sri Lanka considering policy ramifications and explore possibilities to work with Indian counterparts who have successfully implemented derivatives in India,” SEC Director General Channa de Silva told the Daily News Business.

He said that during the visit they are expected to meet top officials from the SEBI, NSE and National Clearing Corporation (CCC) along with two top brokering companies who are predominately recognized for proprietary and client trading operations in India. He also said the India derivative market although started in early 2000 has become one of the top five capital markets in the world with trading volume exceeding US$ 20 billion for a day.

Therefore, the Indian markets have really taken off and their derivatives segment contributes over 70 per cent of the entire market volume in the capital market.

He also said that the Central Clearing Corporation (CCC) is an integral element mitigating settlement and clearing risk components in a capital market. The delegation is also expected to seek advice on how to implement such an entity and how Sri Lanka could collaborate with India for technical and incorporate aspects in the capital market, he said.

De Silva also said that they got good response from SEBI, NSB and also from Mumbai Stock Market. Therefore the Chairman and the Board members along with the CEO of the CSE and other senior officials will study positive steps on the regulations and are working with the industry for a collaborative and speedy implementation of policy frame initiatives which will be a critical factor for the growth of the capital market in Sri Lanka.

He also said that all the Indian institutions are responding very positively to working collaboratively and have expressed their initial interest to partner Sri Lanka on those initiatives. With these developments SCE will introduce exchange traded derivatives and a Clearing Corporation shortly.

The Sri Lankan delegation comprise, SEC Chairman Gamini Wickramasinghe, Director General Channa de Silva, Deputy Director General, Marina Fernando and the Commission members are Shiromi Wickremasinghe, Ravi Abesuriya, and A. Gunasingham. While the Chairman of the Colombo Stock Exchange Nihal Fonseka, CEO Surekha Sellahewa and the Board Members- Paul Ratnayake, J. Thalagodapitiya and M. Jeffery and the representatives of the majority of stock brokering companies are included in this delegation.