Ownership and Governance (Main Shareholders)

The CDS is a fully owned subsidiary of the CSE. The Board of Directors of the Colombo Stock Exchange (CSE) consists of 5 directors elected from Members of the Colombo Stock Exchange and Four Directors appointed by the Minister of Finance.

Brief History

The CDS was incorporated as a private limited liability company under the Companies Act. It commenced operations on 2nd September 1991.It become fully functional on 30th June 1992 once all of the listed companies numbering 185 at the time were absorbed into the CDS. The CDS incidentally was one of the first depositories in the world and the first in the South Asian region.

In 1995 the CDS had major upgrade of its systems in keeping with the increasing volumes of business. In 1997 when trading was automated on the stock exchange the CDS was integrated with the Automated Trading System. At the commencement of the CDS settlement was on a tiered cycle with buyers settling on T + 5 and sellers settling on T +6.Progressively the settlement was shortened and today it operates on T + 3 basis.

Types and number of Participants

• 21 Direct participants (Member Firm participants)
• 15 Indirect participants (Custodian banks)

Regulatory Environment

The CDS is licensed as a Market Intermediary to function as a Clearing House and a Depository by the Securities and Exchange Commission (SEC) of Sri Lanka. The CDS is governed by the CDS rules and is also subject to the ATS rules & Regulations, DEX Rules, Listing Rules, Member Regulations of the stock exchange where applicable and SEC Act and Rules. The CDS is also subject to the rules issued by the Financial Intelligence Unit of the Central Bank of Sri Lanka.

Stock Exchanges

• Colombo Stock Exchange

Other CSDs or clearing organization in your country

Central Depository Systems Pvt Ltd is one of two depositories in Sri Lanka.The other depository is own by the Central Bank of Sri Lanka & it functions as a depository for only Government Debt Securities.

Services Provided

• End beneficiary Account maintenance.
• Dematerialisation
• Rematerialisation.
• Registration of market transactions
• Inter depository transfers.
• Rights issues handling
• Share splits and share consolidations.
• Share repurchases.
• Takeovers & Mergers.
• Entitlement schedules for listed Companies
• Monthly statements for the beneficial account holders.
• Securities Settlement

Eligible Securities

• Equities
• Corporate Bonds
• Government Bills & Bonds.

Corporate Action services Provided? Yes/No (If yes, what kinds of services provided?)

Yes. I. Entitlement schedules for payment of dividends, right issues & bonus issues.
II. Accept and record dividend disposal instructions from beneficiary Account Holders.

Value of Securities in Custody (US$):4.2 Billion (As at 31-Aug-2009)

Amount of Cash Settled per annum (US$):968.9 Million (End of year 2008)

Percentage of Securities Immobilized/ Dematerialized:57% (As at 31-Aug-2009)

Market Capitalization/ Trading volume per annum (US$):7.4 Billon (As at 31-Aug-2009)

Total Revenue/ Expense and Net income Per annum (US$):Tot.Revenue(CDS) 723,312(31-Dec-2008)

Memorandum of Understanding/ Business Agreement (Date)

• None

Cross-Broader Transaction (Counterpart)

None

Withholding Tax Treatment of Cross-Border Trading Transactions (Details)

N/A

DVP Implementation (Yes/No)

No.

Settlement Period

T+3

Contact Information

Contact Person: Rajeeva Bandaranaike

Tel: + 94112356430
Email: rajeeva@cse.lk
Fax: + 94112440396

Remarks CDS has planned to implement the DVP system in 2010.