Frequent asked questions (FAQs)

The Colombo Stock Exchange (CSE) operates the only share market in Sri Lanka and is responsible for providing a transparent and regulated environment where companies and investors can come together. The CSE is a company that is limited by guarantee established under the Laws of Sri Lanka. The CSE is licensed by the Securities and Exchange Commission of Sri Lanka (SEC) and is a mutual exchange consisting of 15 Members and 14 Trading Members.

All Members and Trading Members are licensed by the SEC to operate as Stockbrokers. At present the CSE functions as a market operator and through its fully owned subsidiary, Central Depository Systems (Pvt.) Limited (CDS), acts as a clearing and settlement system facilitator. The CSE also oversees compliance through a set of rules, promotes standards of corporate governance among listed companies and is actively involved in educating investors. In the course of its operations, the CSE interacts with many customers and stakeholders which include issuers (such as companies, corporations and unit trusts), commercial banks, investment banks, fund managers, stockbrokers, financial advisors, market data vendors and investors.

The Exchange is open for continuous trading from Monday to Friday from 11.00 am to 2.30 pm. The trading sessions are as follows:

Open Auction Call

During open auction call, the system accepts orders. These orders can be amended and cancelled during the session. However, no trades take place during this stage. Orders during this period are held in the Automated Trading System (ATS) and will be forwarded to the execution engine at Regular Trading session. At 10.30 am the system starts matching orders according to the algorithm. It establishes the opening price and determines the orders to be executed according to the rules for the open call session (Automated Trading Rule 4).

Regular Trading

During regular trading (11.00am - 2.30pm) 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 Halt

In the event the S&P SL20 Index drops by 5% within the day from the previous market day's close, a 'Market Halt' will be imposed on all equity securities for a period of 30 minutes. In case the above scenario takes place at 2.00 pm or later, the market will be halted and closed at 2.30 pm. Market wide index-based circuit breakers are imposed by stock exchanges to halt trading of equity securities to provide a 'cooling off' period when there is unusual movement in the index. Broker firms may cancel any pending orders during the 'market halt'. However, the broker firms cannot enter new orders or amend pending orders during the 'market halt'.

Equity securities of a public company can be listed on either the Main or Diri Savi Board of the CSE. The Main Board consists of companies which have a larger capital base while medium to small companies and start-up companies are listed on the Diri Savi Board.

The CSE has two main price indices, the All Share Price Index (ASPI) and the S&P Sri Lanka 20 Index (S&P SL 20). These index values are calculated on an ongoing basis during the trading session, with the closing values published at the end of each session. ASPI is a market capitalization weighted index of all companies listed in the CSE. The base value is established with average market value as of the year 1985. S&P SL20 Index is market capitalization weighted and provides liquid exposure as it covers the most liquid stocks from the CSE.

Additionally, the Total Return Indices (TRI) are calculated to tracks the market performance on a Total Returns basis. The TRI exceeds the scope of existing price indices (ASPI and S&P SL20) and incorporates dividends into its computation. CSE publishes TRI based on the ASPI and S&P SL20. Price indices and TRI are also calculated for each of the 20 business sectors based on the ASPI.

Transaction cost applicable for equity and debt securities is given below:

Transactions up to LKR 100 million - 1.12%

Divided as follows:

Transactions over LKR 100 million - Step up basis

Divided as follows:

For example, as seen below, for a transaction of LKR 102Mn, the transaction cost of 1.12% will be applicable for the first Rs. 100 million and 0.6125% will be applicable for the balance amount.

The CSE trading records will indicate the brokerage as zero for transactions over LKR 10 million. The broker firms are expected to insert 0.2% or a higher percentage which is negotiated with the client as the brokerage before printing the Bought/Sold Notes.

The dividends can be directly remitted to your local bank/SIA account. 

Withholding tax of 10% is applicable for dividend income. Currently there are no capital gains tax.

A Unit Trust/Mutual Fund is a collective investment pool made by many investors with a common investment objective. This pool of money is used to purchase a portfolio of financial securities. In exchange for the money invested, the fund issues units to each investor, who are then known as unit holders.

A Unit Trust/Mutual Fund is set up by a trust deed and is an independent legal entity. The trust is administered by its trustee and managed by a professional fund management company under the supervision of SEC.

Unit Trusts/Mutual Funds are ideally suited to people who do not have the time or expertise needed to select individual investment products themselves, or who have limited financial capability but want the benefits of professional asset management and diversification.

Open-ended funds are funds where investors can enter and exit the fund at any time. There is no restriction on the number of units to be issued and the fund has no maturity. 

Pooling of funds with other investors can offer following advantages:

• Liquidity and convenience: The fund invests into short term money market instruments giving fund investors the ability to quickly invest and withdraw their investment
• Competitive risk adjusted returns: The fund returns exceed bank deposit rates of a similar maturity profile
• Security: The fund invests into high quality fixed income instrument issued by rated or listed banks, finance companies, corporates as well as Treasury instruments
• Diversification: The fund could hold more securities than an individual or a company thus diversifying your risk exposure
• Professional fund management: Managed by a highly experienced and professional team of Portfolio Managers backed by a dedicated Research team.
• Efficiency: The fund actively tracks investment maturities, seeks new investment opportunities, and reduces the number of investments to keep track of, freeing time for unit holders. 

A money market fund is ideal for investors looking for short term gains as the fund holding period is typically less than 12 months. It also provides higher liquidity and the ability for investors to enter and exit any time without incurring exit or entry fees.

The Fund will invest into following high quality money market instruments with a residual maturity of less than 366-days. This would include short term fixed income securities such as

• Government bonds
• Treasury bills
• Fixed deposits
• Securitized trust certificates
• Commercial papers
• Debentures
• Repos and reverse repos

Hatton National Bank PLC 

These are the fees charged by the Trustee and Custodian (HNB) to maintain the security of the underlying assets and ensures that the securities are in the funds’ name. This fee will be charged to the fund. 

The total expense ratio is the total cost of running the fund as a percentage of the fund assets

Funds are valued every business day by calculating its NAV (net asset value) per unit. This is calculated by adding up the current value of all financial assets (i.e. debentures, trust certificates, repos, cash etc... in its portfolio and subtracting the total expenses running the fund (e.g. management fee, trustee fee, custodian fee and other operating expenses). The final figure is then divided by the fund’s total number of units in issue, to arrive at the NAV per fund unit. 

For example, assume you will get 100 units at the price of LKR 100 per unit/NAV for a total investment of LKR 10,000. If the price appreciates after 6 weeks to LKR 110/NAV, this means that the market value of your total investment has increased from LKR 10,000 to LKR 11,000.

• Citizens of Sri Lanka who are living within the country.
• Companies, corporations and institutions incorporated or established in Sri Lanka.
• Approved provident funds and approved contributory pension schemes registered / incorporated / established in Sri Lanka
• Nonresidents: persons who are not residents of Sri Lanka, companies with limited liability or bodies corporate established / incorporated outside Sri Lanka

Yes. By opening an inward investment account (IIA) with any licensed commercial bank (LCB) in Sri Lanka, both individual and institutional investors can conveniently route funds in and out of Sri Lankan funds. 

An investor’s investment value in the fund is determined based on the unit price as at date. Unit prices are variable and subject to change, driven by the risks associated with the underlying instrument the fund invests in. In the case of Money Market Funds, investors are exposed to risk such as default. 

• Capital growth: The value (price) of the underlying assets may increase and may be sold for more than the price at which they were bought.
• Income: The underlying assets may earn interest or dividends.

There may be tax reporting documentation required for individual and corporate investors.

We encourage you to speak to your tax advisor before investing as each investor’s situation is different. Under current tax legislation investment returns are tax free at a fund level but, you may be liable to pay income taxes at an individual or corporate level.

Following Governance structures are in place to look after the interests of investors in Unit Trusts:

• The Unit Trust is regulated and monitored by the Securities & Exchange Commission (SEC) of Sri Lanka
• Trustee / Custodian Bank – Hatton National Bank PLC
• Fund auditors – Pricewaterhouse Coopers
• Investment Committee with independent appointees
• Fund managers governed by the CFA institute code of ethics and standards of professional conduct 
• Internal compliance process and risk management team 
• Internal management controls and best practices

Visit the Asia Securities Money Market Fund page on our website and click on the ‘Speak to an agent’ button to get in touch with one of our advisors who will guide you through the account opening process.

You can call us on +94 77 120 7777/8888 or email us on wealth@asiasecurities.lk for more information.

Once the application process is completed, you will receive an SMS with a reference number/account number. You can invest using one of the following methods:

• Visit the bank and deposit money to the HNB collection account
• Do and online bank transfer
• Post a cheque along with a filled Account Opening Form, KYC and Purchase Form

Please write the reference number in the back of the bank deposit slip. If you are doing an online transfer, mention in the online transfer reference field. 

Collection Account Details: 

We strictly do not accept cash under any circumstances. You can make your investment via a bank deposit, bank transfer or by cheque. 

You will receive a unit confirmation email on the following working day if the units have been successfully created.

We assure you that one of our staff members will be in touch with you within two (2) business days following your registration. If and agent is not in touch with you within two (2) business days, please email us at “wealth@asiasecurities.lk”

Please call us on +94 77 120 7777/8888 and we are happy to help you.

Individuals:

• Filled and signed account opening form
• Filled and signed KYC form
• Copy of your NIC/Passport (both sides)
• Proof of residency document

The proof of address is only required if the address provided in the application differs from the address in your NIC.  Water / electricity bill you received during the last 3 months will be sufficient to confirm your billing proof.

Corporates:

• Business registration documents - For companies (ROC) form 1 / Sole Proprietor/Partnership registration / If NGO registration with department of external resources etc.
• Registered address verification - ROC form 1 or form 15
• Correspondence address verification – Tenancy/lease agreement or two authorized signatories confirming the correspondence address on a letter head
• List of directors with their holding – ROC form 15 and 20, M&A, etc
• Identification documents of directors – NIC / Driving License / Passport
• List of top 10 shareholders – Formal letter signed by the company secretary
• Organizational objectives, purpose and authority levels – Memorandum and Articles of Association or related incorporation documents (MOU & Agreements for NGOs)
• Signing powers – Board resolution or power of attorney

Completed and signed documents can be sent via any of the following methods:

• Via Post to Asia Securities Wealth Management (Pvt) Ltd, 4th Floor, Lee Hedges Tower, 349, Galle Road, Colombo 3.
• Via WhatsApp to +94 77 120 7777/8888
• Via email to wealth@asiasecurities.lk

Alternatively, you can also call us on +94 77 120 7777/8888 and we will make arrangements to get it collected.

In the account opening form, the guardian needs to fill his/her details in the “Account Holder Details” section and fill the child's details in the “Joint Holders Details” section. 

Simply email us at wealth@asiasecurities.lk and we will send you the details.

You will receive a payment confirmation via SMS and email

Login to our website and download and fill out a Fund purchase form. Send it together with a copy of the fund transfer confirmation or deposit slip using one of the following methods.

• Via Post to Asia Securities Wealth Management (Pvt) Ltd, 4th Floor, Lee Hedges Tower, 349, Galle Road, Colombo 3.
• Via WhatsApp to +94 77 120 7777/8888
• Via email to wealth@asiasecurities.lk

Yes, minimum of Rs. 500,000 and subsequent investments of Rs. 50,000

Unit subscriptions are created on unit price of the fund depending on the day the money is realized in the collection account.

• If the funds are realized before 9.30 AM, units will be created at the previous day’s price, provided the funds are invested on the same day as part of the deposited property.
• If funds realized after 9.30 AM, units will be created at the same day’s closing unit price.

Simply email us at wealth@asiasecurities.lk  or download and complete the ‘Redemption Form’ available on our website and forward the completed form via email, WhatsApp or post.

Yes, as long as a minimum balance of LKR 500, 000 is maintained in your account.

Normally within three working days after receiving a sell / redemption order.