Wednesday Jun 24, 2026
Wednesday Jun 24, 2026
Tuesday, 23 June 2026 00:11 - - {{hitsCtrl.values.hits}}
The Central Depository System (CDS), a wholly-owned subsidiary of the Colombo Stock Exchange (CSE), has announced a phased framework to suspend non-operative client accounts as part of efforts to strengthen investor protection, improve data quality and enhance regulatory compliance.
In a circular issued to stockbroker firms and custodian banks, the CDS said the new framework will be implemented in accordance with CDS Rule 3.10 and with the approval of the CDS Board. The initiative targets client accounts that have remained dormant for extended periods and is aimed at mitigating operational and fraud-related risks associated with long-inactive accounts.
Under the rules, any CDS account with no transactions for a continuous period of three years is classified as a non-operative or dormant account. The suspension process will be implemented in four phases based on the duration of inactivity.
The first phase, covering accounts dormant for 15 years or more, will take effect on 30 June 2026. Accounts inactive for 10 years or more will be suspended from 30 September 2026, while those dormant for five years or more will be suspended from 31 December 2026. The final phase covering accounts inactive for three years or more will take effect on 31 January 2027.
The CDS said suspended accounts will be restricted from carrying out transactions and dealings until they are reactivated. However, account holders will continue to retain ownership of their securities and remain eligible to receive corporate action entitlements, including dividends and other distributions. Securities held in suspended accounts will not be transferred, forfeited or cancelled.
Stockbrokers and custodian banks have been instructed to notify affected account holders, maintain records of communications, assist with reactivation requests and ensure staff are familiar with the procedures.
To facilitate reactivation, the CDS has introduced a digital process through the CSE Mobile App under the “Non Operative Reactivation” option and through the official CDS website. Reactivation will require updated know-your-customer (KYC) information, compliance with regulatory requirements and successful completion of verification procedures. Institutional account holders will be required to submit CDS Form 31 and supporting documentation through their respective depository participants.
The CDS said the phased implementation is intended to ensure an orderly transition while maintaining the integrity, accuracy and security of Sri Lanka’s depository system.
