Knock Knock

The Colombo Stock Exchange is seeking donor funds to kick-start the derivatives market.
The Asian Development Bank (ADB) had earlier helped out with a consultant to study the possibility of introducing derivative trading through the CSE.rn

rnWhile the consultants were of the view that the market was illiquid, they said that the introduction of tea futures was feasible.rn

rnThe Exchange however, was keen to introduce it through the government securities market, where large volumes of repurchase agreements (REPO) contracts are traded. rn

rnGiven that REPOs are in effect a form of futures contract, the Exchange and industry participants are of the view that introducing futures on government securities may be possible. rn

rnldblquote But we need to get a few things in place like build up awareness and bring in legislations to enable transactions,
dblquote explains Hiran Mendis, CSEs Director General.rn

rnMendis says the Exchange has sought ADB assistance once again to get the preparatory work off the ground.rn

rnThe ADB consultants have suggested a Futures Act be enacted, a detailed study to identify the types of derivates, and a marketing and feasibility report be carried out.rn


-LBO Newsdesk:



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