The Securities and Exchange Commission of Sri Lanka (SEC) and the Capital Market Development Authority of the Maldives (CMDA) signed a Memorandum of Understanding (MoU) on July 21 in Malé.
The scope primarily covers secondary listings by Maldivian companies on the Colombo Stock exchange (CSE), and extends to mutual collaboration, capacity building assistance and regulatory information exchanges between the two capital market regulators to ensure compliance with laws and regulations across both jurisdictions.
Sri Lanka’s High Commissioner to the Maldives, Ranga Goonawardena, SEC Chairman Faizal Salieh, CMDA Chairperson Ms. Aishath Zahira, CSE Chairman Dilshan Wirasekara, SEC Director General Chinthaka Mendis, CSE CEO Rajeeva Bandaranaike, SEC Deputy Director General Tushara Jayaratne, CSE Senior Vice President Commercial, Ms. Punyamali Saparamadu, CMDA CEO Mohamed Hussain Maniku, Deputy Governor, Maldives Monetary Authority, Ahmed Imad, Auditor General Hussain Niyazy, Maldives Stock Exchange Chairman Alau Ali, Maldives Stock Exchange CEO Aushan Latheef and Managing Directors of listed companies were present.
In 2018, the Colombo Stock Exchange (CSE) introduced a Multi-Currency Board (MCB), which represents a crucial step forward in strengthening and diversifying Sri Lanka’s financial ecosystem. This platform permits international companies to list and raise capital in US Dollars, expanding opportunities and fostering a deeper understanding of the Sri Lankan capital market.
The exchange of the MoU.
The MCB offers several benefits, including opportunities to diversify the investor base, enhance market stability, leverage CSE’s sophisticated trading platform, reduce dependency on local economic conditions, and strengthen resilience against global market volatilities.
Section 10 of the Listing Rules of the CSE states that the capital market regulator of the domestic market (where the companies have the primary listing) shall enter into an appropriate bi-lateral agreement with the SEC which provides adequate arrangements for mutual assistance and exchange of information to enforce and secure compliance with the laws and regulations of that jurisdiction and Sri Lanka.
The MoU lays the groundwork for the Maldivian listed companies to list their shares on the Multi-Currency Board of the CSE. This initiative aligns with the ongoing efforts to promote trade and investment between the two countries, marking another significant milestone in Sri Lanka -Maldives relations. SEC Chairman Faizal Salieh said, “This MoU marks a new chapter and a significant milestone in the relationship between the two regulatory bodies and in our collaborative efforts to strengthen regulatory frameworks, promote market integrity, and facilitate greater economic integration between Sri Lanka and Maldives.
“Maldivian companies can benefit significantly from listing on the CSE, by embracing best practices of listed companies in Sri Lanka, access a wider pool of investors, leverage on our capital market infrastructure and achieve more accurate valuations for their stocksgiven the liquidity challenges at home.”
He also talked about the opportunity for listing debt instruments such as Sukuks, Sustainable Bonds and Development Bonds, and secondary listing of SOEs.
CMDA Chairperson, Ms. Aishath Zahira said, “We believe that this bilateral MOU will address the specific development needs of the Maldives Capital Market. Under the MoU, we will explore new access to finance alternatives for local companies, harmonise regulatory frameworks, and integrate systems for cross-border trading activities. Improving the governance of listed companies is also a key area of focus.”
Following the signing of the MoU the CSE conducted a series of one-on-one meetings with several Maldivian listed companies including Amana Takaful Maldives Plc, Centurion Plc, Maldives Islamic Bank Plc, Maldives Transport and Contracting Company Plc, Dhiraagu Plc and Maldives Tourism Development Corporation.
