T+2 comes into force at CSE from today

The shortened settlement cycle to T+2 (trade plus two days) will come into force at the Colombo Stock Exchange (CSE) from today.

The move brings to an end the settlement cycle for equity transactions of T+3 which had been in operation since 2007.

The improvement has been approved by the Securities and Exchange Commission of Sri Lanka.

With the implementation of a Central Counterparty (CCP) system the CSE hopes to progress towards a T+1 settlement mitigating any settlement risks.

A legal entity CSE Clear Ltd., (CCL) has been established as a wholly-owned subsidiary of the CSE. The CCL will obtain a separate licence for clearing and settlement functions which is currently held by the CDS and all the clearing and settlement activities will be transferred to CCL