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What is a Stock Exchange?

A Stock Exchange provides a liquid, open market for buying and selling of shares, debentures
etc. of publicly owned companies. Companies, which use the mechanism of the stock market to
raise debt or equity capital, commonly enter the stock market through issuing shares or
debentures to the public.

What is a listed company?


When a company raises funds to support its growth by selling ownership interests (shares in
itself) to the investing public, those shares need to be "listed" and traded on that country's stock
exchange/s. These companies need to be in compliance with an Exchange's set of listing rules
such as previous profit records, issued/paid up capital etc. in order to be admitted to the official
list.

What is the Colombo Stock Exchange (CSE)?


The Colombo Stock Exchange (CSE) is the organization responsible for the operation of the
stock market in Sri Lanka. The CSE is a company limited by guarantee duly established in Sri
Lanka and licensed by the Securities and Exchange Commission of Sri Lanka (SEC) to operate
as a stock exchange in Sri Lanka.

How do I purchase shares?


There are two ways to purchase shares

From a new issue of shares (Primary Market) The primary market is the market for new shares or debenture issues. In the primary
market, the security is purchased directly from the issuer (company). In a primary issue,
the company offering the share/debenture issue publishes a document known as the
prospectus. It is an invitation to the generalpublic to buy shares or debentures of that
company.
On the Secondary Market through a stock broker A market in which an investor could either buy or sell shares, debentures and
Government Securities from or to another investor, subsequent to the original issuance in
the primary market.

Types of securities traded at the CSE

Shares (Voting and Non-Voting)

Corporate Debentures

Government Securities

Warrants

Closed End Funds

What is Central Depository Systems (Pvt) Ltd?


Central Depositors Systems (Pvt) Ltd (CDS) is a wholly owned subsidiary of the CSE, which has
taken over the functions of Clearing, Settlement and Registration from the Stock Exchange.

How do I open a CDS account?


To open a Securities Account in the CDS you should complete an Account Opening Form, which
can be obtained from your stockbroker or custodian bank. There are no fees charged for opening
a CDS account. Your participant organization may call for documents establishing your identity.
It is possible to open and operate an account on the same day.

Every account will be identified through a unique account number and all correspondence and
dealings, including trading and depository activities, will refer to this account number.

Your CDS accounts should be operated through your Participant organization, and any changes
to your account will have to be forwarded through theParticipant. You cannot issue instructions
directly to the CDS.
What is the purpose of my CDS account?
Your CDS account enables you to participate in paperless trading on the Colombo Stock
Exchange. Your account will be maintained in double-entry book-keeping format and will be
updated on real time as your participant lodges your transactions at CDS.

What is the reason for holding my securities in scrip-less form?


The trading system at the Colombo Stock Exchange is fully automated and thereby the paper
securities you lodge in your CDS account are translated into an electronic portfolio. When you
buy securities, your account is automatically credited with the shares purchased and the
corresponding seller's account is automatically debited with the same amount. Thus the entire
process is automated and involves no exchange of bills or certificates.

Who is a Participant?
A participant is a central depository agent, either a stockbroker or a custodian bank, who has
been authorized by CDS to open accounts in CDS on behalf of investors.

Who are stockbrokers?


Stockbrokers are registered members of an Exchange, authorized to buy and sell shares. These
stockbrokers provide their services to the investing public interested in trading in shares of listed
companies.
The CSE has 15 member firms and 7 trading member firms authorized to buy and sell shares

What do I deposit in a CDS account?


Shares, debentures, warrants, government securities and units of closed end funds

Must I open a CDS account?


Yes, if you intend to trade in shares, which have been selected for depositing, through the
Colombo Stock Exchange.

Can I use a different broker from the one I have been using?
You may maintain multiple accounts through several Participant organisations. You can also
transfer securities across accounts held with different Participants.

Will it cost me more to use CDS?


No. There is absolutely no increase in cost for the CDS accountholder.
What is the process of depositing securities?

Visit a participant with the certificates you want to immobilize.


Be sure you have already opened an account or are ready to do so.

You will be issued with and assisted to complete a Security Deposit Form.

Sign your form with the signature used when buying the shares.

Return the form to the participant together with the certificates you have included on the
form to be deposited.

You will be given a receipt as evidence of your deposit.

The participant will forward the form and the certificate to CDS

CDS will forward the certificates and forms to the companys shares registrar for
verification.

When the registrar confirms the certificates as genuine, the shares will be deposited in
your account.

Once the shares are in your account you can trade in them.

How do you withdraw shares from CDS?


You can withdraw shares from your account, using a withdrawal form that can be obtained from
your broker, the CDS will facilitate the removal of shares from your account so that you may
receive a scrip from the relevant company.

How does Intra- Account transfers occur?

You may also transfer part or all, of your portfolio between accounts opened through different
participant firms. Once the Intra-Account transfer is completed and forwarded through the
respective participant, the CDS will acknowledge by returning a duplicate of said form. Once
checked for accuracy and completeness, the transfer will take effect.

The Exchange has permitted free transfers through different accounts in the CDS in order to
accommodate foreign clients operating in different time zones to that of Sri Lanka on completion
of the relevant form. However these transfers can only be effected before the expiry of two
market days from the date of conclusion of the first transaction ( T +2); and only on condition
that there would be no change in the fund settlement source indicated at the time of the first
transaction as a result of the subsequent transfer

How does Inter-Account transfers occur?


Private Transfer of securities may also take place between account holders providing a valid
relationship exists, prior approval of the Securities and Exchange Commission of Sri Lanka must
be sought in order for such transfers to take place. However, in the instance of death of an
account holder, securities may be transferred to next of kin, using the relevant CDS form without
SEC approval.

What do I get to prove I have deposited securities?

You get the receipt of the deposit form


You get a monthly statement if you have a deposit or a trade that month.

You get a quarterly statement if you have not had a trade for three months.

The statements are issued directly to your address as indicated on the account opening
form.

How Safe Is CDS?


CDS has taken measures to ensure the security of your shares. The company has back up
facilities and procedures that would ensure business continuity in the event of anything
happening either to the computer system or its usual premises. CDS has taken precautions to
ensure its system is not interfered with. CDS has employed staff of high integrity and keep very
high levels of confidentiality.

Colombo Stock Exchange


Level 4, West Block,
World Trade Center, Echelon Square,
Colombo 01, Sri Lanka.
Tel:+94(11)2446581 (Hunting)
Fax:+94(11)2445279
E-mail: info@cse.lk
Website: www.cse.lk
What is a share?
A share represents your ownership in a company. As a part owner you are investing in the future
growth of the company.

What are the types of shares?


Ordinary Shares (N)

A right to vote at the company's Annual General Meeting.


An entitlement to a share of dividends declared.

If the company is liquidated, shareholders will be settled after all the creditors,
depositors, debt holder dues has been settled.

Non-Voting Ordinary Shares (X)


These shares have the same characteristics of Ordinary shares except the right to vote at the
company's Annual General Meeting.

Preference Shares (P)

Most preference shares have a pre-determined dividend rate which you are entitled to
receive.
A claim on the company's earnings before payment to ordinary shareholders.

Entitled to priority over ordinary shares if the company liquidates.

Warrants (W)

This is a certificate giving you the right to buy shares at a stipulated price at a future date.

Is investing in shares risky?


There is an element of risk. However there are strategies to reduce and manage risk through the
diversifying strategy
1. Your portfolio can be a mix of equity and debt instruments.
2. In the share market (equities), you can invest in several sectors. Thereby in an instance when
one sector performs badly and another very well, you can offset your losses in one sector from
the gains you made in the other sector.
3. Within a sector you can invest in several companies. Thereby if one company does not do
well, your entire investment returns do not suffer as other companies may perform well.

Benefits of Investing in Equity

Capital Gains This is when a share's selling price exceed its initial purchase price. If the selling price
falls beyond the purchase price, you would make a capital loss. Capital Gains are free of
tax.
Dividends A company may decide to payout a portion of its earnings to shareholders. But companies
are not required to pay dividends.

Rights Issues The company may extend this privilege to existing shareholders to buy shares at a
specified and usually a discounted price, usually in proportion to the number of shares
already owned.

Distribution by the company Shares shall be offered to the holders of existing shares in a manner which would, if the
offer was accepted, maintain the relative voting and distribution rights of those
shareholders.

Liquidity Shares quoted on a stock market are generally liquid. Therefore, they can be sold easily
and you can get your money back in a few days.

Higher Returns In the longer term, shares have ensured a higher return to investors.

Hedge against inflation Shares are a good investment in an inflationary environment, since share prices increase
to protect investors from the effects of inflation.

How do you buy/ sell shares?


1. In the Primary market from a new issue (IPO)
Shares can be purchased directly from the issuing company. The company publishes a prospectus
with information about the company, financial status, future plans and the offer.

To buy shares: Once you have read the prospectus carefully, you may fill up an application form
to purchase the shares. You can lodge these shares directly into the Central Depository System
(CDS) of the CSE or hold the certificate.

To sell shares: You will have to open a CDS account through a stockbroker and instruct them to
sell your shares in the secondary market.

2. On the Secondary market through a Stockbroker


This is a market in which an investor could either buy from or sell to another investor,
subsequent to the original issuance in the primary market.
You must first find yourself a stockbroker /custodian bank and open a CDS account through that
participant.

Once they confirm your CDS account number, you can contact your broker through the
following ways to trade in the secondary market.

Phone
Fax

Personal visit or

The Internet

You must clearly instruct your broker of the

Name of the company


Number of shares

The price

of the shares which you wish to buy or sell.


A single tier settlement cycle of trade day + 3 (T+3) is adopted to settle transactions.

The buyer must make payment for shares bought by the 3rd trading day after the
purchase (T+3)
The seller will receive payment for shares sold by the 3rd trading day after the sale (T+3)

Transactions up to Rs. 50 Million - 1.02%


Divided as follows:

Brokerage Fees
CSE Fees
CDS Fees
SEC Cess
Share Transaction Levy

- 0.640%
- 0.084%
- 0.024%
- 0.072%
- 0.200%

Transactions over Rs. 50 Million


Divided as follows:

Minimum brokerage (floor)


CSE Fees
CDS Fees
SEC Fees
Share Transaction Levy

- 0.200%
- 0.0525%
- 0.0150%
- 0.0450%
- 0.200%

The CSE trading records will indicate the brokerage as zero for transactions over Rs. 50 Mn. The
Broker Firms are expected to insert 0.2000% or a higher percentage which is negotiated with the
client as the brokerage before printing the Bought/Sold Notes

Taxation
No withholding tax or stamp duties are charged on transactions. However, a 10% tax is charged
on Dividends, deducted at source.

How do you obtain information?

CSE Website www.cse.lk


CSE Publications

Stockbroker websites

Newspapers and business Magazines

Business programmes on TV

Information vendors such as Reuters, Bloomberg, Associated Press etc.

COLOMBO STOCK EXCHANGE


Level 4, West Block,
World Trade Centre, Echelon Square,
Colombo 1, Sri Lanka.
Tel: 94-11-2446581(Hunting)
Fax: 94-11-2445279
E-mail: info@cse.lk
Web: www.cse.lk
Foreign Investment in Shares
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Foreign Investment in Shares

Issuance of shares by resident companies to foreign investors (non residents) is permitted


without prior approval of the Exchange Control Department (ECD) in terms of a general
permission granted in Gazette Notification No.1232/14 of 19/04/2002 and 1248/19 of
08/08/2002 subject to certain exclusions, limitations and conditions. In the areas of investment,
movement of funds of such transactions will be through a scheme of account titled, "Securities
Investment Account" (SIA).

The SIA should be credited by inward remittances received in convertible foreign currencies
from the investors and the dividends and sale proceeds realized on this investment are remittable
through this account.

Permission has been granted for the issue and transfer of shares in a company up to 100% of the
issued capital of such company, to approved country funds, approved regional funds, corporate
bodies incorporated outside Sri Lanka and individuals resident outside Sri Lanka (inclusive of
Sri Lankans resident outside Sri Lanka) subject to the exclusions, limitations and conditions
hereinafter set out.

Exclusions: the permission granted shall not apply in respect of shares of a company proposing
to carry on or carrying on any of the following businesses:

i.
ii.

Money lending
Pawn broking

iii.

Retail trade with a capital of less than One Million US Dollars.

iv.

Coastal fishing

Limitations:
a. The permission granted shall apply in respect of shares in a company carrying on or
proposing to carry on any of the following businesses only up to 40% of the issued
capital of such company, or if approval has been granted by the Board of Investment of
Sri Lanka for a higher percentage of foreign investment in any company, only up to such
higher percentage.

i.
ii.

Production of goods where Sri Lanka's exports are subject to internationally


determined quota restrictions;
Growing and primary processing of tea, rubber, coconut, cocoa, rice, sugar and
spices;

iii.

Mining and primary processing of non renewable national resources;

iv.

Timber based industries using local timber;

v.

Fishing (deep sea fishing);

vi.

Mass communications;

vii.

Education;

viii.

Freight forwarding;

ix.

Travel agencies;

x.

Shipping agencies.

b. The permission granted shall apply in respect of shares of a company carrying on or


proposing to carry on any of the businesses set out below only up to the percentage of the
issued capital of the company for which percentage either general or special approval has
been granted by the Government of Sri Lanka or any legal or administrative authority set
up for the approval of foreign investment in such businesses.
i.
Air transportation;
ii.

Coastal shipping;

iii.

Industrial undertaking in the Second Schedule of the Industrial Promotion Act.


No.46 of 1990, namely

Any industry manufacturing arms, ammunitions, explosives, military


vehicles and equipment aircraft and other military hardware;

Any industry manufacturing poisons, narcotics, alcohols, dangerous drugs


and toxic, hazardous or carcinogenic materials;

Any industry producing currency, coins or security documents;

iv.

Large scale mechanized mining of gems;

v.

Lotteries.

Conditions:

a. A person resident outside Sri Lanka who is a party to a transaction permitted hereunder
must make a declaration to the effect that such person is resident outside Sri Lanka on the
share transfer form or share application form as applicable.
b. The payment for shares in any issue or transaction permitted hereunder should be made
only out of or into a Securities Investment Account (SIA) opened in a commercial bank
of Sri Lanka in accordance with directions given by the Controller of Exchange in that
behalf to commercial banks.
c. A commercial bank, a licensed stock broker or any other person entrusted with the
payment of capital monies such as sale proceeds of shares, dividends and commissions in
respect of any transaction permitted hereunder shall make such payment only into or out
of a Securities Investment Account referred to in sub paragraph (b) above.
d. The Secretary/ Registrar to a company in which the issue or transfer of shares to persons
resident outside Sri Lanka are limited under 'limitations' shall not register the name of
any person resident outside Sri Lanka or a citizen of a foreign State or their nominee as a
share holder in such company if by such registration the limits specified shall be
exceeded.

Securities Investment Accounts (SIA)

Permitted credits and debits to SIA are given below.


1. Permitted Credits
i.
ii.

Inward remittances received from abroad through banking system,


Transfer of funds from NRFC/FCBU/RNNFC accounts of the same account holder,

iii.

Sale proceeds realized out of sale or transfer or maturity of T- bonds/ T- bills or any
income realized by way of capital gain thereof,

iv.

Sale proceeds of shares supported by documentary evidence (Broker's Contract Notes and
evidence of payments of tax etc.) and dividends,

v.

Dividend income on units of unit trusts net of tax supported by documentary evidence,

vi.

Proceeds on redemption of units net of tax supported by documentary evidence,

vii.

Commissions relating to share transactions with supporting evidence,

viii.

Liquidation proceeds of companies,

ix.

Interest received on T-bonds, and

x.

Other all credits permitted on shares in terms of Operating Instructions No.


06/02/12/2001 dated 06.11.2001 in respect of Stock Borrowings and Lending (SBL)
transactions

2. Permitted Debits
i.
ii.

Payments for investment in shares /units of unit trusts / T-bonds/ T-bills,


Outward remittances of sale/redemption/maturity or liquidation proceeds of shares/ units/
T-bonds/ T-bills and dividends of shares or units,

iii.

Payments to brokers, primary dealers, lead managers, management company of a unit


trust and bank charges,

iv.

Payments for local expenses of the account holder,

v.

Transfer of funds to the accounts maintained by the account holder at FCBU, and

vi.

All debits permitted in our Operating Instructions No. 06/02/12/2001 of 06.11.2001 in


respect of SBL transactions on shares.

Other issues with regard to investment in Sri Lanka through a SIA

Foreign currency remitted by foreign investors as subscription for primary shares may be held in
an off-shore banking unit and upon allotment of shares be transferred, to the SIA of the same
investor. Authorized Dealers who are licensed commercial banks are permitted to approve
applications for export of share certificates issued by companies in the CSE in respect of shares
purchased by SIA account holders out of the funds in the account.

Overdraft Facilities, Credit Interest on SIA:


As per Central Bank regulations, foreign investors are NOT PERMITTED to overdraw nor earn
interest (credit/debit balances). Cheque Books are not issued.

Initial Deposit, based on bank's practices, should be via Inward Remittance equivalent in foreign
currency.

Rupee Accounts for Non Resident Sri Lankan Investment (RANSI)

Rupee Accounts for Non-Resident Sri Lankan Investment is a special account to encourage Sri
Lankan citizens residing outside Sri Lanka to remit their foreign exchange earnings for
investment in Sri Lanka.

The account is to be maintained in Sri Lanka Rupees. Joint accounts are not permitted under this
scheme.

Who is eligible to open an account?


- Sri Lankan citizens who are permanent residents of other countries.
- Sri Lankan citizens who have proceeded outside Sri Lanka for taking up employment or setting
up in a business or profession and continue to reside abroad.

Funds channelled through this account may be invested in shares, government securities,
debentures, units in Unit Trusts and in real assets such as land and building.

Source: Central Bank of Sri Lanka

Download as pdf

To invest in the Colombo Stock Market, all Investors must maintain an Account in the Central
Depository System (CDS). Foreign Investors may operate their CDS Account either directly
through a Stockbroker Firm or through a Commercial Bank offering Custody Services. Please
click here to obtain a list of documents required in opening a CDS account.

Please refer CDS Participants section to obtain a list of Stockbrokers & Commercial Banks
offering Custody Services.

Trading Sessions
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Trading Sessions
Trading Sessions

The Exchange is open for continuous trading from Monday to Friday from 9.30 a.m. to 2.30 p.m.

Secondary trading of corporate and government debt securities through the DEX takes place
from 9.30a.m. to 12.30p.m.

The trading sessions for equity as follows:

Market Phase

Time

Pre-open

9:00 - 9:30

Open Auction

9:30

Normal Trading

9:30 - 14:30

Closing

14:30

Days

Monday - Friday (Except Public Holidays)

Pre- Open
During pre-open (9.00 am to 9.30 am) the system accepts orders. These orders can be
amended and cancelled during pre-open. However, no trades take place during this stage.
Orders during this period are held in the ATS and will be forwarded to the execution
engine at Open Auction time.

Open Auction
During open-auction (09.30 am), the system temporarily closes the order book and starts
matching orders. It establishes the opening price and determines the orders to be executed
according to the rules for the open-auction period (Automated Trading Rule 4).

Regular Trading
During regular trading (09.30 am to 2.30 pm) new orders are continually matched to
existing orders in the order book. If an order cannot be executed, it is stored in the order
book.

Market Close
Market closes at 2.30 pm.

Market Halt
In the event the Milanka Price Index (MPI) (or the index that may replace the MPI in the
future) drops 5% within the day from the previous market day's close, a "Market Halt" be
imposed on all equity securities for a period of 30 minutes. This is effective from 2nd
January 2009. Market wide index based circuit breakers are imposed by stock exchanges
to halt trading of equity securities in order to provide a "cooling off" period when there is
an unusual movement in the index.
Broker Firms may cancel any pending orders during the "Market Halt". However Broker
Firms cannot enter new orders or amend pending orders during the "Market Halt".

How to Find a Stockbroker


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How to Find a Stockbroker


Who is a Stockbroker?
A stockbroker is a firm that acts as an intermediary for stock market transactions, offering

investors a variety of services in addition to investment advice and executing buy/ sell orders of
investors. The Stockbroker's fee is the brokerage.

There are 15 Member Firms and 6 Trading Members at the Colombo Stock Exchange (CSE).
They are governed by the regulations set out by the CSE and licensed by the Securities and
Exchange Commission (SEC). It is mandatory for you to obtain the services of a stockbroker
when transacting in the secondary market.

What services do they provide?


Intermediation
1. Investment advice
Execute and confirm buy / sell transactions
Settlement of transactions - T+3 for Equities and Delivery vs Payment (DVP) for Corporate and
Government debt
Follow-up on defaulters and Portfolio Management
2. Research
Most brokers have a research unit that studies the market in general and specific companies in
particular. With this research they are able to recommend shares for you to purchase. They
publish research in the form of

Sector reports
Daily & Weekly reports

Company specific reports

Daily valuation reports

The broker makes recommendations to the best of his ability and should not be liable in case the
recommendation is found to be incorrect.
3. Margin Trading

Broker Firms could provide this service, to its clients, subject to a registration to be obtained
from SEC.
4. Corporate Finance Activities
Advise and facilitate takeovers and mergers
Sponsoring listing applications for companies.
Client Registration & documentation

Opening of Securities Accounts


Deposit of Securities

Withdrawal of Securities

Transfer of Securities

Provision of Contract Notes

Settlement of transactions

Providing information

Assistance and information dissemination with regard to new issues

Qualities of an Investment Advisor


The Stockbroker should act in the client's best interest. Therefore, he should possess the
following qualities.

Competence
He should be qualified and experienced and have a thorough knowledge of market
behaviour. Your investment advisor should hold the Investment Advisor Certification or
be certified by the SEC.
Integrity
The stockbroker should give fair treatment to his clients, and not for his personal gain. He
must account for all transactions properly.
Knowledge about "what's happening around"
The Investment Advisor should possess knowledge on the needs of the client and market

behaviour which is affected by political, economic, legal, natural, social and


technological factors.

Forecasting
This is the process of analyzing current and historical data to determine future trends.
Stock analysts use various forecasting methods to determine future stock price
movements, earnings, etc.

What are their fees?


Transactions up to Rs. 50 Million - 1.02%
Divided as follows:

Brokerage Fees
CSE Fees
CDS Fees
SEC Cess
Share Transaction Levy

- 0.640%
- 0.084%
- 0.024%
- 0.072%
- 0.200%

Transactions over Rs. 50 Million


Divided as follows:

Minimum brokerage (floor)


CSE Fees
CDS Fees
SEC Fees
Share Transaction Levy

- 0.200%
- 0.0525%
- 0.0150%
- 0.0450%
- 0.200%

The CSE trading records will indicate the brokerage as zero for transactions over Rs. 50 Mn. The
Broker Firms are expected to insert 0.2000% or a higher percentage which is negotiated with the
client as the brokerage before printing the Bought/Sold Notes
Investor Complaints
If you have a complaint, first inform the Compliance Officer of your broker firm in writing. The
Compliance Officer should be able to help you and resolve the complaint. If you are not satisfied

or if the broker delays a decision, you can forward your complaint to the CSE for investigation.
The Secretariat of the CSE will deal with the complaint thereafter.

If you are not satisfied with the decision of the Secretariat, an appeal can be made to the Dispute
Resolution Committee (DRC), to review the decision made by the Secretariat. Thereafter, the
decision made by the DRC will be verified by the Board of Directors and conveyed to you.

Transaction Costs
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Transaction Costs
Transaction Costs
Transaction cost applicable for equity & debt securities given below:
Equity - with effect from 1st January 2011
Transactions up to Rs. 50 Million - 1.12%
Divided as follows:

Brokerage Fees
CSE Fees
CDS Fees
SEC Cess
Share Transaction Levy

Transactions over Rs. 50 Million


Divided as follows:

- 0.640%
- 0.084%
- 0.024%
- 0.072%
- 0.300%

Minimum brokerage (floor)


CSE Fees
CDS Fees
SEC Fees
Share Transaction Levy

- 0.200%
- 0.0525%
- 0.0150%
- 0.0450%
- 0.300%

(Subject to a minimum brokerage of Rs. 10/- per contract and a minimum CDS fee of Rs. 5/-)

The CSE trading records will indicate the brokerage as zero for transactions over Rs. 50 Mn. The
Broker Firms are expected to insert 0.2000% or a higher percentage which is negotiated with the
client as the brokerage before printing the Bought/Sold Notes.

Intra day Trading


With effect from 15th February 2006, the transaction fee due to the broker, CSE, CDS and SEC
on intra day trades, where a client buys and sells or sells and buys the same security on the same
day through the same broker will not be charged on one side of the transaction.

(Please note that Share Transaction Levy will be charged on both sides of the Transaction)

a. In the event the total number of shares purchased does not equal the total number of
shares sold, the transaction fees as detailed above will not be levied on the lower quantity
of shares either purchased or sold.
b. In the event the total quantity purchased is equal to the total quantity sold the transaction
fees will not be levied from the sales transaction.

Please note that the total purchases and sales of a client in the same security will be considered
for purpose of determining the exemption of the Brokerage, CSE, CDS and SEC fees
(transaction fee).

Eg:
i.

Client X's trades in ABC shares on particular day

Bought
Sold
Bought
Sold
Sold

1,000 shares
1,000 shares
4,000 shares
2,000 shares
1,000 shares

Total Purchases = 5,000 shares


Total Sales = 4,000 shares

No transaction fee will be levied on the 4,000 shares sold, apart from the Share
Transaction Levy.

ii.

Client V's trades in ABC shares on a particular day

Bought
Sold
Bought
Sold
Bought

Total Purchases = 900 shares


Total Sales = 1,500 shares

500 shares
1,000 shares
300 shares
500 shares
100 shares

No transaction fee will be levied on the 900 shares purchased, apart from the Share
Transaction Levy.

Odd lots, Crossing and AON trades will not be considered for the exemption of Brokerage, CSE,
CDS and SEC fees.

Note:
A Member Firm may share 50% of the brokerage with a foreign broker if a foreign broker is
involved in a transaction.

Corporate Debt

Brokerage - Negotiable
Fees (SEC, CSE & CDS) - 2 Basis Points (D ivided equally amongst the three institutions)

Government Debt

Brokerage - Negotiable
Fees (SEC, CSE & CDS) - Nil

Closed End Funds

Fees based on a Percentage (%) of the Transaction value

Brokerage
CSE Fee

Negotiable with a Cap of 1 %


0.02%

CDS Fee
SEC Cess

0.01%
0.02%

Share Transaction Levy will not be applicable for units of Closed-end Funds.

Trading Systems
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Trading Systems
Trading Systems

The CSE offers advanced infrastructure and systems for the trading of equity and debt
instruments through two trading systems. Post trade clearing and settlement of transactions is
executed through the CDS system.

The Automated Trading System (ATS) is an online, real time system which is efficient, fault
tolerant and transparent, and provides for the secondary trading of equity. The ATS version 4 has
recorded 99.8% system uptime.

The ATS provides

High speed execution of transactions


Order matching on Price - Time priority

Information of price & volumes of securities being traded

Online reporting of trades being executed & price indices

Corporate announcements

Information on status of pending orders

Information on Client Holdings

The Debt Securities Trading System (DEX) is designed to facilitate the trading of corporate and
government debt securities. The system has been instrumental in facilitating the secondary
trading of the beneficial interest in government treasury bills and bonds. All corporate debentures
listed on the CSE are also traded through the DEX.

The DEX provides

Delivery vs. Payment (DVP) settlement


On line, real time liquidity management

Facilities for Repo & Reverse Repo transactions

Online market information & post trade transaction information

Collection of maturity proceeds & coupon interest of investments on behalf of clients


(For Government Securities)

Trading of minimum units of Rs. 1/- each (for government securities)

Settlement cycle will depend on the board on which the trade takes place.

The boards are

CASH Board - Settlement on Trade date (T)


TOM Board - Settlement on T+1

SPOT Board - Settlement on T+2

Forward Board - Settlement over T+3

Crossing Board - Negotiated trades (Only for Govt. Debt.)

Sell and Buy Back (SBB) Board - Sale/purchase on a predetermined date in future at a
predetermined price. (Only for Govt. Debt.)

SBB Crossing Board - Negotiated SBB transactions. (Only for Govt. Debt.)