ECONOMYNEXT – Sri Lanka’s Securities and Exchange Commission is evaluating proposals to set up a derivative exchange, Chairman Hareendra Dissabandara said.
The exchange is to be set up in Colombo Port City.
“The SEC is currently in the process of evaluating proposals to establish a multi-asset class derivatives exchange,” Dissabandara told an investment forum organized by the SEC and Colombo Stock Exchange.
“This initiative aims to introduce a comprehensive platform that encompasses a range of underlying asset classes, including commodities, thereby broadening market participation and enhancing risk management tools for investors.
“By facilitating the trading of derivatives, we seek to deepen liquidity, improve price discovery, and offer sophisticated financial instruments that cater to the evolving needs of market participants.”
Related: Sri Lanka’s CSE joins India’s NCDex for derivative exchange bid
Sri Lanka’s Colombo Stock Exchange has teemed up with India’s NCDex to submit one of the proposals.
The full speech of the SEC Chairman is reproduced below:
Speech by the Chairman of the Securities and Exchange Commission of Sri Lanka
Invest Sri Lanka Forum
It is an honor to address this distinguished gathering at the Invest Sri Lanka Forum. At the outset, let me express my gratitude to all of you for your continued confidence in Sri Lanka’s economic and capital market potential.
Sri Lanka has endured its worst economic crisis in history. However, through collective resilience and strategic reforms, the country has rebounded faster than expected. Today, we stand at the threshold of a new era—one that demands a robust and well-functioning capital market to support the real economy.
At the Securities and Exchange Commission of Sri Lanka (SEC), our duty is to ensure that financial markets fulfill their fundamental purpose—funding economic growth and creating opportunities for investors and businesses alike. As both a protector and an enabler, we uphold market integrity through regulation while also fostering an environment that fuels growth, drives innovation, and instills lasting investor confidence. Our mission goes beyond oversight; it is about striking a balance between strong governance and dynamic market development.
With the enactment of the new Securities and Exchange Commission Act in 2021, we have significantly strengthened our regulatory framework to uphold the integrity of Sri Lanka’s capital market. This landmark legislation empowers us to combat market misconduct more effectively, enhance corporate governance standards, and safeguard investor rights. By enforcing stronger compliance mechanisms, promoting accountability among market participants, and adopting international best practices, we are laying the foundation for a capital market that is not only robust but also positioned for sustainable growth. Our commitment to these principles ensures that the market remains a credible and attractive platform for investment, ultimately contributing to Sri Lanka’s broader economic aspirations.
We have never wasted a crisis; instead, we have learned, improved, and evolved our skillsets to better monitor the markets and safeguard financial stability. In line with global advancements in regulatory oversight, the SEC has selected a cloud-based Supervisory Technology (SupTech) system—an innovative platform that integrates data analytics, artificial intelligence, and automation to enhance our supervisory efficiency. In an environment of increasing complexity and resource constraints, SupTech will enable us to detect potential risks early and ensure effective regulatory compliance.
Further strengthening our market surveillance capabilities, we have taken a significant step by selecting a state-of-the-art market surveillance system from Nasdaq. This advanced technology will be implemented in mid-June and equip us with superior tools to detect and respond to market anomalies, scams, and manipulation, reinforcing our commitment to maintaining a fair, transparent, and resilient financial market.
Beyond regulation, the SEC is committed to fostering capital market development by introducing innovative products and platforms. Our aim is to add depth to our market and provide diverse investment opportunities for a broad range of investors with varying risk appetites and investment horizons.
We have introduced a regulatory framework for green bonds and blue bonds, marking a significant step towards sustainable investment in Sri Lanka. While our green finance journey is still in its early stages, we have already secured two listings, demonstrating growing investor interest in environmentally responsible financial instruments.
In addition, we have expanded our market offerings by introducing perpetual bonds, infrastructure bonds, high-yield bonds, Sukuks, stock borrowing and lending, and regulated short selling. These instruments will not only broaden investment opportunities but also play a crucial role in supporting long-term capital formation, particularly for critical infrastructure development.
The SEC is currently in the process of evaluating proposals to establish a multi-asset class derivatives exchange. This initiative aims to introduce a comprehensive platform that encompasses a range of underlying asset classes, including commodities, thereby broadening market participation and enhancing risk management tools for investors. By facilitating the trading of derivatives, we seek to deepen liquidity, improve price discovery, and offer sophisticated financial instruments that cater to the evolving needs of market participants.
We are also in the final stages of establishing a regulatory framework for social bonds and sustainability-linked bonds. These new instruments will further enhance market liquidity and efficiency, reinforcing our commitment to a more dynamic and inclusive financial ecosystem.
Looking ahead, as Sri Lanka navigates its economic resurgence, the Securities and Exchange Commission (SEC) remains steadfast in redefining its role in supporting capital formation—a critical driver of sustainable economic growth. To drive economic revival, we have developed a comprehensive, indigenous roadmap with short-term, medium-term, and long-term strategies, all aligned with the government’s vision to build a nation that funds its growth through equity and innovation. Having successfully achieved our short-term objectives, we are now advancing to the next phase—implementing our medium-term plans to further strengthen Sri Lanka’s financial future.
In an era defined by rapid technological advancements, the integration of digital assets and infrastructure is essential to modernizing Sri Lanka’s financial ecosystem. Embracing innovation in capital markets will not only enhance efficiency and accessibility but also unlock new avenues for investment and growth. We want to create a dynamic and resilient market that fosters long-term stability, ensuring sustainable prosperity for Generation Alpha, Beta, and beyond.
We call upon investors, businesses, and all stakeholders to actively participate in this transformation. Your trust and engagement will be vital in shaping a stronger, more resilient, and globally competitive securities market.
In conclusion, Sri Lanka’s economic revival is an opportunity to build a future-ready capital market—one that is innovative, transparent, and inclusive. Together, let us work towards realizing the full potential of our market and driving sustainable economic growth.
Thank you.
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