Sri Lanka securities regulator to allow short selling in equity markets
Author Gayan Chandrasekara
June 16, 2015
June 16, 2015 (LBO) – Sri Lanka’s securities watchdog, the Securities and Exchange Commission says it is currently looking at the regulatory frame work to allow short selling in the equity markets.
“We are thinking of short selling for the equity market with certain guild lines.” Director General of the Securities and Exchange Commission, Vajira Wijegunawardene said.
He emphasized the need to have a strong mechanism to allow short selling especially in the equity markets.
“With equities obviously you are not going to allow any stock to be short sold. It has to be certain liquidity criteria and other requirements,”
“That will happen along with buy in board with the Central Counter Party implementation.” Wijegunawardene added.
He was speaking at the 63rd LBR LBO CEO forum held recently in Colombo.
The Automated Trading System at the Colombo Stock Exchange is currently coupled with the Central Depository Systems blocking short selling of securities.
“With the new initiatives it’s going to be decoupled which means people will be able to sell securities that they do not have,”
“Right now we are working on the policies to enable short selling.” Wijegunawardene said.
He further stated that the unlisted bond market in the country will also get streamlined through the regulator intervention.
“There is an unlisted bond market as well. So with the amendment to our SEC act that market would also come under the purview of SEC,”
“We have also allowed foreigners to invest in corporate bonds which were not allowed earlier.” Wijegunawardene further stated.
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