Cabinet nod for CSE demutualization

The cabinet approval has been received for a draft law to demutualize the Colombo Stock Exchange (CSE) into a for-profit company. The draft will be published by gazette in a few weeks.

Prime Minister Ranil Wickremesinghe, who is also National Polices and Economic Affairs Minister, presented the draft law to the cabinet of ministers. 

Currently, the CSE operates as a limited by guarantee company, which is mutually owned by the founder stockbroking firms. But it cannot distribute profits.

The demutualization will make the CSE a limited company with the founding stockbrokers being entitled to ownership of shares in the exchange. The CSE trading members, who are later licensed, are not entitled to stock. 

Usually the demutualization of an exchange is followed by the listing of the new entity on its own exchange.