Forum Views - February 2023
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FORUM VIEWS - FEBRUARY 2023
start the same. This initiative helped all four settlement banks at
the time to coordinate the daily interbank settlement
expeditiously and complete the process in a timely manner.
2. Digital Front Desk (DFD)
Digital Front Desk concept was introduced in 2018 in order to
enhance the process of documents submissions and transfers
from the depository participants to the CDS and vice-versa. The
traditional model of submitting documents physically to the CDS
was completely eliminated through this initiative. Further, the
preparation of all stakeholders for a major Digitalization drive was
also planned with the same.
3. e-Dividend Payments.
e-Dividend Payment concept was introduced in 2017 in order to
provide a better service to listed issuers by offering novel and
cost-effective solution and at the same time providing investors
with timely payment of dividends.
However, with the Covid pandemic the CDS had to expedite its
efforts further. In this backdrop The Securities and Exchange
Commission of Sri Lanka (SEC) and Colombo Stock Exchange
jointly formed a committee for the Digitalization of the Stock
Market in May 2020. Under the direction and the
recommendations of the SEC/CSE Digitalization Committee, the
CSE/CDS was able to design the business framework and
implement the Digitalized onboarding of individual local investors
in 2020. The individual foreign investor and local corporate
investor digitalized onboarding was done in 2021. e-IPOs and
Virtual AGMs are initiatives taken by the CDS during this
Digitalization drive of the stock market.
1. Digital Onboarding of CDS Accounts.
The initiative of Digitalizing of onboarding of CDS account holders
via the CSE Mobile App was implemented in 2020 in order to
make the entry to market more convenient with the reduction in
time to market. The main challenges were to come up with an
acceptable business process, especially concerning the KYC
guidelines. With the assistance of the SEC/CSE Digitalization
Committee, the CSE and the CDS could sign a Memorandum of
Understanding with the Department of Registration of Persons
(DRP) of Sri Lanka to authenticate online applicants via the DRP
database. This MOU was a significant boost to the development
of digitalization of the entire country since it gave precedent to so
many other initiatives as well. Currently, the digitalized
onboarding of local individual investors and local corporate
investors is almost 100%. The CSE and the CDS have already
made plans to improve the digitalized onboarding of other investor
categories in the next couple of years.
2. CDS e-Connect - Investor interactions between
stockbroker firms and the CDS.
The CDS e-Connect is the one-stop shop for all investors. This is a
feature included in the CSE Mobile App where CDS account
holders can conveniently access in order to interact and submit
instructions related to depository matters. Following are some of
the services provided via the CDS e-Connect.
a. Balance view.
b. Transaction history view.
c. Monthly statements for past six months.
Digitalization Journey of the CDS - Post-Covid
d. Account detail change instructions directly/ online from the
client.
e. Intra account transfer requests directly/ online from the client.
f.
Digital CDS 28 - e-Mail and Mobile Number change requests.
g. Research portal access.
h. e-Nominations submissions.
3. e-IPO Applications.
This enabled the investors to apply for an IPO from wherever they
are without having to go to a physical location. Moreover, the
issuers can also attract more investors via this facility since the
process is more convenient.
4. Virtual General Meetings.
The major drawback in having general meetings of companies
physically is that not every shareholder can participate due to
reasons such as distance and work. Moreover, it is a massive
burden for listed issuers logistically and financially to conduct a
General Meeting in the current context. Therefore, Virtual General
Meeting is the most comprehensive solution for issuers and
investors.
Not only in capital markets but, every industry has to go through
many challenges after implementing Digitalization. If
implementation was a challenge, convincing market participants
to adopt Digitalization in day-to-day activities has become more
than a challenge. Once you start the Digitalization journey, there is
no turning back. The more you digitalize more you will see the
gaps in existing business processes. However, one has to have
determination and perseverance to carry out the change
management through all these challenges.
1. Handholding elderly investors when using digitalized
services.
2. Maintenance of a dynamic Help Desk.
3. Conducting continuous awareness programs for
stakeholders.
4. Execution of improvements dynamically to the current
digitalized services.
Solutions to Post Digitalization Challenges and Continuous
Development.
Nadeera is currently serving as the Deputy Head of Central Depository Systems
(CDS) of the Colombo Stock Exchange (CSE), Sri Lanka. He has been with the
CDS for more than 14 years. During his tenure at the CSE, in addition to working
for the CDS, he worked as the Assistant Manager - Trading and Market
Surveillance Division in 2017 and as Assistant Manager - Special Projects
attached to the CEO’s Office from 2019 to 2021.
He has also played vital roles in projects listed below,
1. Implementation of Debt Securities Trading in Automated Trading System in
2012.
2. Implementation of the new core depository system for the CDS in 2014.
3. Establishing the Corporate Solutions Unit of the CDS in 2018, which is the first
new business initiative/ diversification of the CDS.
4. Introduction of the e-Dividend and e-IPO concept.
5. Implementation of Delivery Vs. Payment (DVP) in 2021.
6. Leading the business side of the Digitalization Projects.
He was appointed as a member of the SEC/ CSE Joint Committee for
Digitalization in 2020, which took significant initiatives during 2020-2022.
He has a B.Sc in Business Administration (Business Economics) Special Degree
from University of Sri Jayewardenepura, Sri Lanka and has completed the MBA
from Cardiff Metropolitan University, United Kingdom.
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