SEC unveils 12-Pillar roadmap to transform Sri Lanka’s capital market

By Nishel Fernando

Minister Dr. Anil Jayantha Fernando (left) receiving the ‘12 Pillars One Vision for a Resilient Market’ from SEC Chairman Senior Prof. Hareendra Dissabandara  Pic by Pradeep Pathirana

The Securities and Exchange Commission of Sri Lanka (SEC) this week launched a comprehensive strategic roadmap aimed at transforming the nation’s capital market into a resilient, innovative, and globally competitive hub. 

Themed ‘12 Pillars One Vision for a Resilient Market’, the plan outlined a series of transformative projects designed to revitalise the economy, enhance investor confidence, and mobilise capital for long-term development.

The ambitious reform agenda is built to deliver three core outcomes over the next decade. 

“Over the next decade our strategy will be driven by twelve key developmental and regulatory priorities.

“Our ultimate goal is to build a dynamic and resilient market that fosters long term stability, ensuring sustainable prosperity for generations to come,” said SEC Chairman Prof. Hareendra Dissabandara speaking at the launch.

He noted that the aim is to foster continuous innovation in the capital market to ensure its relevance and responsiveness to the evolving needs of the economy and investors; enhance infrastructure and services to be more efficient, accessible and reliable; and to develop a diverse market ecosystem that strengthens the competitiveness and resilience of the overall capital market.

Endorsing the initiative, Labour Minister and Economic Development Deputy Minister Dr. Anil Jayantha Fernando stressed that quality capital formation is a critical for Sri Lanka’s economic trajectory.
“The next take-off is nothing but investment. Without investment, we can’t expect growth,” he told the gathering. 

Describing the capital market as a vital platform for national development, he asserted that scattered, insignificant capital cannot make a big push for economic development. 

“We need to pull them together, and the stock market is the platform for that,” he said, calling the market’s function “a public duty” that channels savings into productive investments.

Dr. Fernando urged regulators and industry players to lower entry barriers and attract grassroots savers, arguing that broader participation is key to boosting liquidity and efficiency. 

“If you really want robust capital formation and exponential growth, we need to bring them together to the capital market and close the gaps,” he said.

SEC’s roadmap is structured around twelve key projects that address market infrastructure, product diversity, regulatory frameworks, and investor engagement.

Key structural reforms include the demutualisation of the Colombo Stock Exchange (CSE), which will transition it from a member-owned entity to a company limited by shares to enhance governance and efficiency.  Another cornerstone is the implementation of a Central Counterparty (CCP) mechanism, which went live in August 2025, to guarantee trade settlements and reduce counterparty risk, thereby strengthening market stability.

A major focus is on product innovation to deepen the market. The plan includes the development of the corporate debt market, the introduction of new products like GSS+ (Green, Social, Sustainable) bonds and Sukuk, and the establishment of a multi-asset class derivatives exchange for futures and options. These initiatives aim to provide diverse funding sources for corporates and new opportunities for investors.

Other strategic pillars include developing the Collective Investment Scheme (CIS) industry to improve access for retail investors and enhancing investor education and awareness to broaden the investor base. Additionally, the market aims to facilitate digital transformation through AI-powered solutions and modern infrastructure, while also enabling effective risk management and strengthening the regulatory framework to protect investors and maintain market integrity.