DVP to go live on CSE from today

The Securities and Exchange Commission of Sri Lanka (SEC) and Colombo Stock Exchange (CSE) will introduce a Delivery vs. Payment (DVP) system for stock market transactions from today. 

After successful testing and industry-wide mock runs, the DVP system is scheduled to go live today.
The DVP system on CSE was initially scheduled to go live on July 26, 2021. But it was postponed with stockbrokers requesting for more time to upgrade their systems.  

Presently, the delivery of shares occurs immediately upon the execution of the transaction while fund settlement takes place three market days after the transaction date (T+3), thus exposing the seller to a three-day settlement risk. 

Although stringent measures had been introduced to reduce settlement risk and the CSE never experiencing a settlement failure, the globally accepted mechanism for minimising settlement risk is through a DVP system where the securities and funds are exchanged simultaneously on the settlement date.