CSE enables REPO transactions between eligible investors operating through same trading participant on OTC Platform

The Colombo Stock Exchange (CSE) announced the amendment of Trading Rules on the Over the Counter (OTC) Platform, where Repurchase (REPO) transactions in Corporate Debt Securities would be permitted between two (2) eligible investors operating through the same trading participant.  

The amended rules have been approved by the Securities and Exchange Commission of Sri Lanka and will be effective from 17th February 2023. 

Initially, the Repurchase transactions on the OTC Platform were permitted only between a Trading Participant and an eligible investor operating through such Trading Participant or between two Trading Participants. 

The newly permitted transaction type ensures a minimum cost for both parties who engage in the Repurchase transactions. 

The decision to amend the Trading Rule on the OTC Platform has been carried out by the CSE in response to the feedback received from the stakeholder institutions dealing in fixed income securities.

The amendment is an important step in the product expansion line-up of the CSE and is projected towards establishing a vibrant REPO market for Debt Securities listed on the CSE.

Last year, the CSE also made a downward revision of the transaction fee structure applicable to REPO transactions on Corporate Debt Securities carried out on the OTC Platform in order to encourage transactions which is a fixed percentage of 0.02 percent (per annum) of the transaction value.