CSE software systems to enhance effectiveness

H. D. H Senewiratne

The Colombo Stock Exchange (CSE) will introduce a risk management software system to enhance its efficiency and effectiveness in trading, with the amalgamation of both debt and equity markets into a one single platform third quarter next year.

A committee has been appointed to find ways and means to implement this new system, which had not decided to implement it during a period of twelve months. Once the Automated Trading System (ATS) upgrading had been completed, it will introduce the two systems which would minimize the risk ensuring that both ownership transfer and payment for securities happen at the same time," CSE Chairman Krishan Balendra told 'Daily News Busienss'.

He said that strategy for the implementation of this risk plans at the CSE, envisions an extensive consultation process with all stakeholders ,including custodians, investors and regulators. For the successful completion of the process, brokers and other participants would have to take steps to convert to the new settlement mechanism and risk management practices. "Therefore, they would obtain the services of the National Stock Exchange (NSE) of India, which was the largest exchange in India with a daily turnover and number of trades, for both equities and derivative trading."

CSE would bring in stringent risk management systems into the brokering houses in a bid to facilitate these systems. The CSE source added that introducing a risk management system was a precursor to bringing in demutualisation and dematerialisation of the CSE Exchange and establishing the Central Counter Party (CCP) system.