Sri Lanka to upgrade financial system infrastructure
Sri Lanka has embarked on an ambitious task of upgrading the financial system infrastructure while maintaining an appropriate legal and regulatory framework, Central Bank (CB) sources disclosed.
The country’s banking regulator has sought consultancy services for the establishment of a state-of-the-art financial market infrastructure and the enabling legal and regulatory framework.
As a part of this ongoing venture, the CB plans to set up a new Electronic Trading Platform (ETP) and a Central Counterparty (CCP) clearing and settlement system and a Central Securities Depository (CSD) system to facilitate electronic trading and straight-through processing of transactions in the domestic financial market.
Straight-through processing (STP) is an initiative used by financial companies to speed up the transaction process.
This is performed by allowing information that has been electronically entered to be transferred from one party to another in the settlement process without manually re-entering the same pieces of information repeatedly over the entire sequence of events.
The goal of STP is simple; reducing the time it takes to process a transaction will increase the likelihood that a contract or an agreement is settled on time, a senior CB official explained.
The project has multifaceted objectives which include deepening and widening of the activities of the domestic financial market to facilitate efficient price discovery and enhanced efficiency through properly managed settlement and counterparty risks and greater investor protection to ensure financial system stability, he said.
The CB has called expressions of interest (EOI) from prospective bidders to provide consultancy services covering state of the art IT solutions for ETP, CCP and CSD for financial market instruments, including Government securities or similar debt instruments.
Bidders such as a firm, a consortium or a joint venture which individually or jointly has provided consultancy should be prepared to actively engage its senior consultants who have involved in reference sites until the successful completion of the proposed project.
The prospective bidder must have one or more relevant and comparable live reference site(s) for each of the systems – ETP, CSD and CCP, the CB’s advertisement on EOIs has revealed.