Over the past few years, the Colombo Stock Exchange (CSE) has been developing its market infrastructure to improve efficiency, trust, and resilience. The launch of CSE Clear in 2025 marked a step toward a Central Counterparty model, while the digitalisation of investor services and the adoption of global risk and data protection standards have reinforced market confidence. Together, these initiatives are building a faster and more secure capital market aligned with international best practices.
Chandrakanth Jayasinghe, Chief Market Operations Officer at the CSE, explains how these reforms are strengthening post-trade operations and setting the stage for the next phase of growth.
As Sri Lanka moves toward a more sophisticated market infrastructure, what prompted the CSE to enhance from a DvP model to a CCP-driven settlement ecosystem?
We introduced Delivery versus Payment (DvP) settlement in August 2021 to strengthen market integrity by ensuring securities are transferred only after payment. This reduced settlement and asset commitment risks through synchronised delivery of funds and securities, supported by a new margin framework. As trading volumes expanded, the bilateral DvP model created operational and settlement risks, which led us to move toward a Central Counterparty (CCP) framework.
In 2025, we established CSE Clear Ltd, a fully owned subsidiary of the CSE licensed and regulated by the Securities and Exchange Commission of Sri Lanka. As the CCP for all equity transactions, it guarantees the completion of trades, i.e. ensuring securities delivery to buyers and fund settlement to sellers, enhancing trust and resilience. The CCP framework also provides the foundation for deeper market development, supporting more sophisticated products and broader investor participation.
Our long-term vision is to transform CSE Clear into a multi asset class clearing house serving multiple products and stock exchanges. We are upgrading our technology infrastructure to support new products such as derivatives and building direct connectivity with banks. These efforts include ongoing plans towards shortening the settlement cycle to T+1.
In recent years, the CDS has implemented several digital transformation initiatives. What has been the impact of these initiatives on the market?
Over the past few years, we have fully digitalised the investor journey and engagements with the Central Depository Systems (CDS). The shift from physical to digital processes has increased investor confidence and participation, particularly among younger investors. Our digital channels now handle close to 99% of all new account openings, which have doubled in volume
We introduced a suite of e-services to enhance investor convenience, including CDS e-Connect, e-IPO, e-Rights, e-Dividends, and e-Nominations. These services are seamlessly integrated with national payment gateways, enabling investors to make payments and manage subscriptions effortlessly. Our digital transformation has strengthened the CDS’s capacity to handle higher operational volumes and positioned us on par with leading regional depositories.
The CDS has expanded its service horizon into Registrar Services through our Corporate Solutions Unit, which now leads the market segment. By introducing innovative, technology-driven solutions such as e-IPOs and e-dividends, we have successfully elevated the standards of the Registrar Services industry.
We are planning to expand the CDS into new custody areas such as escrow services and digital assets while upgrading technology to enable processing of corporate actions end-to-end seamlessly.
The CDS will continue its drive to enhance investor experience and convenience by upgrading our mobile application, introducing a web-based version of CDS eConnect, establishing a centralized Deceased Record Repository connecting stakeholders, and leveraging advanced data analytics to deliver actionable insights for issuers and company secretaries.
The Corporate Solutions Unit’s future plans include developing an integrated registrar platform with e-proxy voting and e-AGM solutions, further modernizing and uplifting the post-trade environment and the registrar services industry
How is CSE leveraging its data privacy, information security, and business continuity frameworks to build enterprise-wide resilience, strengthen risk management, and ensure long-term operational resilience?
We have strengthened our risk management and resilience by embedding internationally recognised standards into our governance framework. The adoption of ISO 27701 for data privacy allowed us to establish a comprehensive Data Privacy Management Program that ensures personal data is handled responsibly, transparently, and in compliance with Sri Lanka’s Personal Data Protection Act. Continuous monitoring, structured controls, and clear accountability have enhanced our ability to safeguard sensitive information and build stronger trust among investors and market participants.
Building on this foundation, ISO 22301 for business continuity has reinforced our ability to maintain uninterrupted operations during disruptions. It helps us identify critical functions, assess vulnerabilities, and implement effective continuity and recovery strategies. Regular testing and cross-functional simulations now ensure that we can respond swiftly to a wide range of operational disruptions such as cyber incidents or natural disasters.
Information and cyber security are critical to CSE Group’s operations. In response to an evolving threat landscape, we have strengthened our governance by aligning to ISO 27001 framework, integrated Zero Trust principles and deployed advanced technical controls. We have enhanced detection and incident response capabilities through real-time monitoring, AI-driven anomaly detection and automated workflows ensuring proactive threat mitigation and rapid containment. These efforts have enhanced digital trust among stakeholders and reinforced cyber resilience across the CSE Group
All these frameworks are guided by our broader Enterprise Risk Management (ERM) framework which we strengthened across the CSE Group in 2025. We introduced a structured, KRI-based approach to identify and mitigate emerging risks early. Looking ahead to 2026, our priority is to automate ERM processes, implement real-time monitoring, and expand our focus to include new emerging risks such as sustainability and climate-related risks. Together, these efforts will strengthen our resilience and risk culture across the organisation.
What underlying market needs are shaping your plans to enhance reporting standards, upgrade digital user experiences, and modernise broker infrastructure?
We are taking several steps to align market infrastructure with emerging investor needs and global standards. By March next year, we will be introducing requirements for XBRL reporting by listed entities, creating a standardised and transparent format for financial reporting. This will improve data accuracy, accessibility, and comparability for all stakeholders.
To attract the next generation of investors, we are developing a pre-funded trading system that links directly with bank wallets. This will allow younger investors to begin trading with any amount through a seamless digital platform. At the same time, we are upgrading broker infrastructure to make it more resilient and responsive to future product expansions and higher trading volumes.
Supporting this digital transition, we have mandated the collection of key account information, such as email addresses, mobile numbers, and bank details for all investors starting from 2026. These updates will strengthen digital connectivity across the ecosystem and prepare the market for faster, more secure, and inclusive participation.