The project to set up a CCP system for equities was launched at a Joint Securities and Exchange Commission of Sri Lanka (SEC) – Colombo Stock Exchange (CSE) meeting at the SEC recently.
The Chairman of the SEC, Viraj Dayaratne PC who chaired the meeting said the project should be completed on time in the same way the Delivery vs Payment (DvP) project was completed since this will significantly enhance the post trade risk management of the equity market.
He said that the new SEC Act has all the enabling provisions to facilitate the implementation of a CCP mechanism.
The meeting was attended by SEC Commissioner Sunil Lankathilake who is the Chairman of the joint Committee, the Director General of the SEC Chinthaka Mendis, Director, Surveillance and Acting Director, Capital Market Development, SEC, Prabash Wanigatunge and senior SEC officials. The CSE was represented by Chairman Dumith Fernando, CSE Directors Dilshan Wirasekera and Suren De Silva, Chief Executive Officer of the CSE Rajeeva Bandaranaike, the Chief Regulatory Officer Renuke Wijayawardhane and senior CSE officials.
The Chairman of the Joint Committee, Lankathilaka outlined the importance of studying the practices adopted in other jurisdictions in facilitating a CCP mechanism in order to identify the most suited model for the Sri Lankan market. He said that as the next step, a business model for the CCP system will be finalised based on which a project plan will be developed to ensure the successful implementation of the initiative within a specified time frame.
Director General, SEC, Chinthaka Mendis said that the CCP business model should be developed in a cost effective manner which would benefit all stakeholders in the market.
Chairman, CSE, Dumith Fernando said that this was part of the plan agreed upon with the SEC to first introduce DvP and then set up a CCP and said that he was satisfied that both phases of the project are getting implemented as scheduled. He said that the business model has to be agreed upon and the inception report that was already prepared by the CCP consultants could be used for this purpose.
CEO, CSE, Rajeeva Bandaranaike made a presentation on the overall scope of the CCP implementation.
A CCP can offer significant benefits to the financial market in Sri Lanka and can be considered as part of the critical financial market infrastructure that is needed and is of national interest, he said.