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The Asian Development Bank is giving technical assistance to develop a comprehensive master plan for the Sri Lanka capital market, including required policy and institutional reforms.

The plan will cover equities, bonds, derivatives including commodities, money market, and a capital market tribunal, the ADB said last week.

The Capital Market Development Programme, which will support the government’s commitment to meaningful capital market reform, will also examine the requirements to convert Colombo into an international financial center.

The ADB program will help the government in further “developing a legal and financial supervisory policy structure that strikes the right balance in financial regulation and enhances the stability of Sri Lanka’s financial system,” it said.

“The TA will help develop measures to remove inherent conflicts of interest, and enhance liquidity and public trust,” the ADB said. The programme will analyze structural and institutional issues, such as the limited autonomy of the Securities and Exchange Commission and the Insurance Board of Sri Lanka and recommend measures to solve or minimize them.

The feasibility of investing in an information and communication technology system to enhance regulatory and enforcement capacities (such as real-time surveillance) at the SEC and IBSL will also be assessed.

The ADB said it will also help assess and guide the establishment of a capital market tribunal, review legislation related to accounting and auditing standards, and recommend measures to strengthen the Sri Lanka Accounting and Auditing Standards Monitoring Board.

The creation and introduction of a Small and Medium-Sized Enterprise (SME) Board on the Colombo Stock Exchange will also be examined.