HSBC appointed settlement Bank of CDS

HSBC entered into an agreement with Central Depository System Pvt Ltd (CDS), a wholly owned subsidiary of the Colombo Stock Exchange, following HSBC’s appointment as a Settlement Bank of Central Depository System Pvt Ltd. HSBC is the only foreign bank to be appointed by CDS, to facilitate the latter’s move towards a multiple bank settlement system.
The agreements were exchanged between Head of Corporate Banking for HSBC Sri Lanka Chamira Wijetilleke and Chairman of the Colombo Stock Exchange Nihal Fonseka, on Friday January 8, 2010 at the Colombo Stock Exchange. HSBC will commence settlement operations with effect from January 12, 2010.

The exchange of agreement made between Chamira Wijetilleke, Head of Corporate Banking, HSBC and Nihal Fonseka, Chairman, Colombo Stock Exchange

As a Settlement Bank, HSBC will be responsible for facilitating the settlement process relating to trades on the Colombo Stock Exchange between the CDS and the accounts of CDS participants who have opted to settle through HSBC. Head of Corporate Banking for HSBC Chamira Wijetilleke, Sri Lanka stated, “We are proud to have been recognised for our undisputed capabilities in delivering the best cash management solutions through state of the art systems.
HSBC is committed to assisting companies achieve efficient working capital management by optimising internal business processes and improving visibility and control over their cash flows. As the leader in cash management solutions having won many accolades by Global Finance and Euromoney, we are indeed happy to be appointed as a settlement bank to CDS, and are fully geared to offering stockbrokers efficient, robust and reliable settlement solutions.”
This arrangement will give market participants the flexibility to choose their settlement bank and minimise the cash deposit risk borne by investors.
The prime function of the CDS is to act as the depository for all securities traded on the CSE and is responsible for the post trade settlement of transactions. It holds securities in trust for holders of securities of quoted companies pending transactions via the Automated Trading System (ATS) and Debt Securities Trading System (DEX) of the CSE.