SEC to introduce structured warrants to stock market

• To be first step towards the development of an exchange traded derivatives market

Sri Lanka’s Securities and Exchange Commission (SEC) is currently in the process of developing a policy and regulatory framework for the introduction of structured warrants as a possible first step towards the development of an exchange traded derivatives market.

Structured warrants, which are proprietary instruments issued by a third-party issuer, is expected to usher in various benefits by expanding the existing product portfolio for investors.

SEC expects structured warrants to contribute to a diverse selection of local and foreign institutional investors in the market.

The SEC has already secured technical assistance from the ADB to develop policy and regulatory framework for the envisaged introduction of structured warrants to the Colombo Stock Exchange (CSE).

Based on feedback received during stakeholder consultations, SEC has developed draft guidelines for the introduction of structured warrants and it has been shared with the CSE. 

“Upon receiving comments from the CSE, the guidelines will be presented to the industry for stakeholder comments,” the SEC said.