CSE introduces new OTC platform for REPO transactions on debt securities

• Applications called for new trading members to carry out REPO transactions

The Colombo Stock Exchange (CSE) has taken the initiative to introduce a new Over the Counter (OTC) platform to carry out REPO transactions on debt securities. 

This new mechanism is introduced as a significant initiative in the product expansion line up of CSE, projected towards establishing a vibrant REPO market for debt securities listed on the CSE. 

The new OTC platform established to carry out REPO transactions on debt securities will create a further regularised opportunity for Investors, trading members and other corporates involved in the fixed income securities market in Sri Lanka. 

In view of the said development, the CSE invited applications for trading membership from eligible entities to carry out REPO transactions on debt securities on the new OTC platform to be implemented by the CSE shortly. 

Entities entitled to apply for trading membership of the CSE are; Institutions appointed by the Central Bank of Sri Lanka as an ‘Authorized Primary Dealer’, which is incorporated under the Companies Act No. 07 of 2007 or Commercial banks licensed by the Central Bank of Sri Lanka which are incorporated under the Companies Act No. 07 of 2007.

The entities seeking trading membership of the CSE will be required to engage in REPO transactions on debt securities on the new OTC platform with other trading members and/or with its own clients (who are eligible to carry out such REPO transactions on the OTC platform). 

The new trading members admitted by the CSE could commence REPO transactions on the OTC platform subsequent to obtaining license from the Securities & Exchange Commission of Sri Lanka (SEC) as a stock dealer and stockbroker (as applicable).

The new OTC platform will be implemented by the CSE shortly based on the consultations that CSE had with key stakeholders and experts in the fixed income market in order to make the platform feasible. 

The relevant rules in this regard, approved by the SEC, will be published by the CSE in due course.
Applicants interested in applying for trading membership to carry out REPO transactions on debt securities on CSE’s OTC platform should complete the application form which is available on the CSE website, and forward the completed applications as per the procedure mentioned in the ‘General’ section of the application. Completed applications should reach the CSE on or before 26thJuly 2021.