Mistaken account suspension forces late market opening

The Colombo Stock Exchange (CSE) delayed the commencement of trading yesterday after an exercise to suspend the long-dormant investor accounts inadvertently affected a number of active Central Depository System (CDS) accounts, forcing the market operators to intervene before the opening bell.

The disruption took place after CDS implemented the suspension of accounts that had remained inactive for more than 15 years. This was in line with a circular issued on June 15, as part of the ongoing investor protection measures. However, certain active accounts were also mistakenly suspended during the process.

The error was detected during the market’s pre-open session, prompting the exchange to extend the Market Auction Call while restoring the status of the affected accounts. Regular trading eventually commenced at 11:00 a.m., after the issue was rectified.

The incident can be called a rare operational disruption for Sri Lanka’s stock market, which took place as market institutions intensify efforts to improve the quality of investor records and strengthen safeguards within the country’s capital market infrastructure.

In a statement, the CSE said the extension of the pre-open session was necessary to ensure a fair and orderly market and expressed regret for the inconvenience caused to the investors and market participants.

The development follows a recent push by CDS to identify the dormant accounts and strengthen investor protection mechanisms, including measures aimed at reducing the risks associated with inactive holdings and outdated account information.