The capital market received a fresh boost last week with the launch of a facility to register accounts digitally and trade at the Colombo Stock Exchange (CSE), by Capital Alliance (CAL), an investment banking firm.
The online facility is aimed at retail investors who comprise a small segment of the investors in the Stock Exchange. Unlike manual registration of accounts which makes i
nvestors go through a tedious process of documentation, the online facility is a hassle-free and effective registration mechanism. The manual registration of accounts at the CSE requires filling of four documents which is a cumbersome process that dissuades investors to come into the Stock Exchange. This is the first time an online register of accounts is being introduced by a broker at the CSE.
CAL completes the documentation with the information furnished by investors who only need to sign them online. The company targets around 10 percent of the retail investors to join the digital register of accounts initially and also plans to leverage on the over six million mobile users in the country who are tech savvy and prefer advanced technology for trading.
The move is hailed by capital market experts as one that is long over due to the country which needs to keep pace with the rest of the world that uses modern technology for trading.
Sri Lanka is far behind many countries in moving towards a paperless trading system that takes off inconvenience, cost and time taken to trade which results in loss of competitiveness. Verite Research at a recent forum highlighted the urgent need to move on to digital trading if the country needs to be competitive in the global business arena. Even though the provision for electronic trading was created in 2006 with Electronic Transaction Act No 19 of 2006 there has bee less interest on the part of policy makers to make the provision mandatory for international trade.
Capital market analysts said it is sad to note that a large number of public institutions continue to use paper to conduct business when technology is evolving rapidly transforming the global trading system.
CAL Group Director/CEO Ajith Fernando said the company has created a gateway for client to trade online with minimal hassle. The facility provides ease of use and flexibility to investors. The facility enables investors to open an account by placing digital signatures being anywhere in the world. Rolling the facility the company has partnered eMudhra Ltd, a leading certifying authority in Asia and a pioneer in e signatures, digital identity and authentication solutions.
The system comprises automation and manual verification to ensure the authenticity of customers. - LF