• To be the first step towards the development of an exchange-traded derivatives market

Sri Lanka’s Securities and Exchange Commission (SEC) is currently developing a policy and regulatory framework for the introduction of structured warrants as a possible first step towards the development of an exchange-traded derivatives market.

Structured warrants, which are proprietary instruments issued by a third-party issuer, are expected to provide various benefits by expanding the existing product portfolio for investors.

The SEC expects structured warrants to contribute to a diverse selection of local and foreign institutional investors in the market.

The SEC has already obtained technical assistance from the AfDB to develop a policy and regulatory framework for the proposed listing of structured warrants on the Colombo Stock Exchange (CSE).

Based on feedback received during stakeholder consultations, the SEC has developed draft guidelines for the introduction of structured mandates and it has been shared with the CSE.

“After receiving comments from the CSE, the guidelines will be presented to the industry for stakeholder comment,” the SEC said.