ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange is making a renewed push to demutualize the bourse in to a limited company in 2025, which can lead to international partnerships in the future, Chairman Dilshan Wirasekera said.
The CSE is now a entity limited by guarantee with brokers as members where profits are not distribute and bill has to be passed in the parliament with the backing of the government to demutualize into an ordinary limited company.
Under a draft bill, the model considered is for broker members to get 60 percent and a market development funder under trustees to get 40 percent, or a 30 to 70 split.
After demutualization, half the holdings should be sold down, which can be listed or used to attract a foreign exchange as a partner.
“The demutualization bill advocates that both parties will sell down up to half their holdings,” Wirasekera said.
“So you would have an effective 50 percent that’s available for a foreign investor or another investor from outside to come and acquire.
“Whether we do it at a listing, whether we identify a strategic investor like another exchange, for example, we say NASDAQ.”
“So we also can use that opportunity to attract a foreign investor. And then it’s not just your shareholding, but you get a lot of other knowledge, systems, processes.”
The CSE has been trying to demutualize for many years, but has the bill has so far not gone through parliament.
The CSE has also committee to look into regulations. The CSE also wants to look at regulations to ease listings.
“We are also looking at how we can enable an effective regulatory framework,” Wirasekara said.
“There are certain onerous regulations that both the regulator and the CSE might look at to facilitate new activity in capital markets. So that’s also being looked at by a separate committee.”
The CSE was also looking at digital securities, derivatives and strengthening risk management. (Colombo/Mar19/2025)
