A meeting of the joint committee of the SEC and CSE with stockbrokers
- Approves amendments to Stockbroker Rules, CDS Rules and Listing Rules
- Statement of Accounts, Bought and Sold Notes, CDS monthly statements in electronic format
- Payment of shareholder dividend through electronic bank transfers
- Introduction of online CDS account opening without visiting a stockbroker office
- Post-trade settlement process for local retail individuals will be done electronically
The Securities and Exchange Commission (SEC) has approved amendments to the Stockbroker Rules, Central Depository Systems (CDS) Rules and Listing Rules submitted by the Colombo Stock Exchange (CSE), which will enable the stock market to transition from a paper-based to an electronic-based environment.
Under the amended rules, Statement of Accounts and Bought and Sold Notes sent by the stockbroker firms to their clients and CDS monthly statements sent to the account holders will be converted from the paper-based hard copies to the electronic format.
The rule amendments will facilitate the listed companies to send the annual reports to their shareholders in a mode other than in printed form and the payment of dividends through electronic bank transfers.
Investors are encouraged to make available their email addresses, bank account numbers and mobile numbers in the prescribed format to their stockbrokers in order to continue to receive the relevant statements in an uninterrupted manner.
These changes are part of the market digitalisation initiative initiated by the SEC-CSE
Under this initiative, an online account opening process would also be facilitated, whereby an investor could open a CDS Account, start trading and make settlements electronically, without the need to physically visit an office of a stockbroker.
Presently, Internet-based trading is enabled through all stockbrokers and the account creation and maintenance at CDS and fund settlement between stockbroker firms and banks are fully electronic. The investors are therefore urged to register for online trading and online banking services.
However, under this initiative, the account opening process with the stockbroker, which is presently paper based and the post-trade settlement process for local retail individuals, which is mostly cheque based, will be converted to an electronic format, thereby bringing significant operating efficiencies to the system and improving the client experience and convenience.
This will also assist in ensuring uninterrupted market operations in the event of unexpected restrictions.