According to Chairman Dilshan Wirasekera, the Colombo Stock Exchange in Sri Lanka is redoubling its efforts to demutualize the exchange into a limited corporation by 2025, which may pave the way for future international collaborations.
With brokers as members, the CSE is now a limited by guarantee organization. Profits are not distributed, and a law to demutualize into an ordinary limited company must be approved by the parliament with government support.
A draft bill considers a 30 to 70 split, with broker members receiving 60 percent and a market development funder under trustees receiving 40 percent.
Half of the holdings should be sold off after demutualization so they can be listed or used to draw in foreign investors.
According to Wirasekera, “the demutualization bill advocates that both parties will sell down up to half their holdings.”
As a result, you would have an effective 50% that is open to acquisition by an outside investor or foreign investor.
“We can do it at a listing, or we can find a strategic investor, like another exchange, like NASDAQ, for instance.”
Therefore, we can also take advantage of that chance to draw in a foreign investor. Additionally, you receive a wealth of additional knowledge, methods, and procedures in addition to your shareholding.
For many years, the CSE has been working to demutualize, but the measure has not yet passed parliament.
To examine rules, the CSE also has a committee. Regulations to facilitate listings are another area of interest for the CSE.
According to Wirasekara, “we are also looking at how we can enable an effective regulatory framework.”
To encourage new participation in the capital markets, the CSE and the regulator may consider some burdensome measures. Therefore, a different committee is also looking into that.
Additionally, the CSE was examining derivatives, digital securities, and improving risk management.
