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.

What is the Colombo Stock Exchange (CSE)?

The organization responsible for the operation of the stock market in Sri Lanka is known as the Colombo Stock Exchange. 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.

What is a listed company?

Raising of funds by a company to support its growth by selling ownership interests to the investing public, those shares need to be listed and traded on that country’s stock exchange/s. Also these companies need to be in compliance with an Exchange’s set of listing rules.

How do I purchase shares?

There are two ways to purchase shares: From a new issue of shares (Primary Market) – IPO , Private Placement On the Secondary Market through a stock broker 

Type of Securities traded at the CSE

Shares (Voting and Non-Voting)/Preference Shares

• Corporate Debentures
• Government Securities
• Government Securities
• Warrants
• Closed End Funds

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 us.

Fees Charged for account opening.

There are no fees charged for opening a CDS account.

Purpose of the 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.

Must I open a CDS account?

Yes, if you intend to trade in shares.

What do I deposit in a CDS account?

You can deposit shares, debentures, warrants, government securities and units of closed end funds.

About the Transaction cost

Trading Sessions

• Pre-open 9.00 am – 9.30 am
• Open auction 9.30 am
• Normal Trading 9.30 am -14.30 pm
• Closing 14.30 pm

What is Debt Trading?

Deposit of Securities

You may deposit shares held by you in script form (certificate form) into your CDS account. Hand the share certificate with a duly completed ‘Sold Transfer’ form to your participant and shares will be lodged in your account by the CDS immediately upon receipt of the documents.

Withdrawals of Securities

To withdraw securities from the CDS you should submit a duly completed ‘Bought Transfer’ and a ‘withdrawal form’ to the CDS through your participants. The securities will be withdrawn from your CDS account and you will receive a securities certificate within seven market days.

Intra and inter Account Transfers

You can transfer your portfolio in full or in part to another participant/s provided all outstanding payment has been settled.

Clearing and Registration of Ownership

Securities can be maintained by investors in script form or script-less form. However it is mandatory that securities, which are in script forms, are lodged with the CDS prior to sale of securities. If you have purchased securities you will not receive script, but instead will receive a written confirmation of the trade from your participant. This written confirmation is the confirmation of the transaction and serves the invoice for payment. You could also have share allocations obtained through IPO’s, Rights, Bonus or any other issue directly deposited into your CDS account or alternatively, you could request scrip. However, the use of the CDS account for direct upload purposes ensures speed, security and efficiency. All securities traded on the CSE are cleared by the CDS. Securities accounts are uploaded on real-time as a transaction is completed.

Settlement

A single tier settlement cycle of trade day +3 (T+3) is adopted to settle the transactions
The buyer must have realized funds by the 3rd day (T+3)
The seller will receive payment for shares sold by the 3rd trading day after the sale (T+3)

What are Preference Shares?

Preference Shares, like ordinary shares carry part ownership of the company but preference shareholders are entitled to a fixed rate of dividend each year which is paid prior to any ordinary dividend.

The type of internet trading package provided by us?

It’s a web based application. User has to go to the link, type in the user name and password. (No additional software are needed in order to use this application)

Is there a credit limit when buying shares online?

If the client is a first time investor, then the credit limit will be restricted to the amount that is deposited in cash beforehand. If the client already holds a portfolio, then the credit limit is usually equal to around 40% of the portfolio.

What is an odd lot?

Less than 100 shares are considered an odd lot.

Can we trade odd lots on the online trading system?

Yes you can.

What about online security?

We at LOLC Securities make every effort to keep your account and personal information secure. Using updated security, technology and fraud prevention measures, we strive to provide a strong defense against electronic scams and fraud.

How can I log in in case I forget my password?

Should this happen, promptly contact our IT department and they will change your password.

Will there be confidentiality of my transactions?

We guarantee our clients total confidentially in terms of their portfolios & transactions.

Is there a minimum amount required to open a CDS Account or an Online Trading Account?

No minimum amount is required.