CSE’s Central Depository System reaches 25-year mark

Top officials of the Colombo Stock Exchange (CSE) and the Securities and Exchange Commission (SEC) at the CDS silver jubilee celebrations in Colombo 
 Pic by Kithsiri de Mel

By Shabiya Ali Ahlam
The capital market operator yesterday reached a new corporate milestone with the Central Depository System (CDS) having got to its 25 year mark.
The CDS, established in 1991 by the Colombo Stock Exchange (CSE), was the first depository in South Asia and among the first few depositories globally. It is a wholly owned subsidiary of the CSE and is licensed as a Market Intermediary and Clearing House by the Securities and Exchange Commission of Sri Lanka (SEC).
The 25 year journey of the entity came under fresh focus at the CSE yesterday where the silver jubilee was celebrated at an event that was graced by top CSE andSEC officials. Attending the event as special guest was Asia-Pacific Central Securities Depositories Group Chairman Mohammed Hanif.
The entity was initially established through a USAID grant. CDS acts as a depository in respect of securities traded on the CSE and hold the securities in custody on behalf of shareholders of the listed companies. While it forms an interface between trading and post trading tasks, the CDS also performs the post trading functions of clearing and settlement.
The CDS interacts with 51 market participants comprised of 15 Member firms, 20 Trading Members and 16 Custodian Banks. Speaking at the ceremony, CSE Chairman Vajira Kulatilaka stressed the CDS can be used in a broader manner than what it is currently used for, and plans are afoot to further commercialize the entity.
“You can do a lot of business with the CDS. It is not only the share transaction that you do. Today’s world is data driven and this data we use for commercial purposes. Our target is to use this data for the betterment of the CSE and for that we will be commercializing CBD more and more,” said Kilatilaka.
Reflecting similar sentiments, SEC Director General Vajira Wijegunawardane said the continuous upgrade of the CDS has offered an array of value added services for investors and stakeholder, which is imperative.
According to the CDS website as of December 2015 the system has had a total of 786, 963 registrations. Of that, 581, 775 are local individuals, 4,486 are foreign individuals, 9.082 are local companies, and 4, 899 are foreign companies.