Colombo Stock Exchange introduces GSS+ Bonds

In line with a broader, more inclusive approach and in alignment with evolving global standards, the Colombo Stock Exchange (CSE) has announced the launch of the GSS+ Bonds Regulatory Framework.

This marks the first comprehensive regulatory framework in Sri Lanka dedicated to thematic bonds.

Under this initiative, the term “Sustainability Bonds” in the CSE Listing Rules has been replaced with “GSS+ Bonds,” which now encompasses Green, Blue, Social, Sustainability, and other related bond types, including Sustainability-Linked Bonds.

Social Bonds are fixed-income instruments where proceeds are exclusively allocated to finance or refinance projects aimed at addressing social challenges and generating positive social outcomes—such as improved access to essential services, affordable housing, education, healthcare, and employment opportunities. The global Social Bond market has seen significant growth in recent years, driven by rising investor interest in fostering inclusive and sustainable development.

In a significant development, the requirements for issuing GSS+ Bonds are now fully aligned with the guidelines of the International Capital Market Association (ICMA). This alignment ensures consistency with globally accepted practices and enhances the credibility and transparency of the sustainable finance instruments listed on the CSE.

The verification framework has also been enhanced. In addition to the previously accepted forms of assurance and impact reporting, issuers may now utilise enhanced methods such as Second Party Opinion and Certification, providing additional layers of investor confidence and credibility.

These rule enhancements were made possible through the collaborative efforts of the Asian Development Bank (ADB) and the Securities and Exchange Commission (SEC) of Sri Lanka, underscoring the commitment of all stakeholders to elevate Sri Lanka’s sustainable finance landscape to meet international best practices.

The primary objective of this initiative is to enable capital raising for projects with measurable environmental and social impact, while also offering investors the opportunity to align their investment strategies with Environmental, Social, and Governance (ESG) principles. 

The introduction of GSS+ offers wide-ranging benefits. For issuers, it opens access to a new pool of capital dedicated to funding projects with positive social outcomes. Investors gain an opportunity to diversify their portfolios with instruments that deliver both financial and social returns. At a broader level, the initiative supports responsible capital allocation and contributes to key national development priorities such as poverty alleviation, gender equality, access to healthcare, and inclusive education.

CSE CEO Rajeeva Bandaranaike said: “The introduction of GSS+ to the Sri Lankan capital market represents a significant step in our journey towards promoting sustainable finance. This initiative not only expands the suite of sustainable investment products available in the market but also empowers issuers to raise funds for socially impactful projects that can make a lasting difference in our communities.”

“We are proud to support this important development, which reflects our ongoing commitment to align capital market infrastructure with global best practices and to play an active role in Sri Lanka’s sustainable economic growth.”

The CSE said it remains committed to advancing ESG-aligned initiatives and providing market participants with robust frameworks for sustainability-oriented investments. The introduction of GSS+ Bonds reinforces the CSE’s role in facilitating financial innovation that contributes meaningfully to national and global development goals.