CSE says shortened settlement cycle for equity trades takes off well

The Colombo Stock Exchange’s (CSE) implementation of the shortened settlement cycle for equity trades has been executed seamlessly with the first settlement under the T+ 2 cycle taking place on 12 June marking a significant milestone in Sri Lankan capital market operations. 

Investors have experienced swift payment processing, receiving their funds within two days for the first time since the cycle reduction.

Following collaborative efforts with the Securities and Exchange Commission of Sri Lanka (SEC) and industry stakeholders, the transition to a T+2 settlement cycle on 10 June, has yielded tangible results. Investors now benefit from expedited fund transfers and security exchanges, with transactions settling within a shorter timeframe.

Enterprise Risk Management and Post Trade Settlement Senior Vice President Dulani Warnakulasooriya said: “Moving to a shorter settlement cycle has proved to increase the settlement efficiency.  This change will further benefit the market participants by freeing up working capital and lowering the collateral requirements.”

The successful implementation of the shortened settlement cycle not only reduces operational risks but also amplifies market liquidity. Further, this achievement underscores the effectiveness of the CSE’s strategic initiatives in enhancing investor experience.