SEC signs landmark MoU with Maldives Capital Market Regulator
The Securities and Exchange Commission of Sri Lanka (SEC) and the Capital Market Development Authority of Maldives (CMDA) signed a landmark Memorandum of Understanding (MoU) on July 21, 2024 in Malé.
The scope primarily covers secondary listings by Maldivian companies on the Colombo Stock exchange (CSE), as well as extends to mutual collaboration, capacity building assistance and regulatory information exchanges between the two capital market regulators to ensure compliance with laws and regulations across both jurisdictions.
In 2018 the Colombo Stock Exchange (CSE) introduced a Multi-Currency Board (MCB), which represents a crucial step forward in strengthening and diversifying Sri Lanka’s financial ecosystem. This platform allows international companies to list and raise capital in US Dollars, expanding opportunities and fostering a deeper understanding of the Sri Lankan capital market.
The MCB offers several significant benefits, including opportunities to diversify the investor base, enhance market stability, leverage CSE’s sophisticated trading platform, reduce dependency on local economic conditions, and strengthen resilience against global market volatilities.
The MoU lays the groundwork for Maldivian listed companies to list their shares on the Multi-Currency Board of the CSE. This initiative aligns with the ongoing efforts to promote trade and investment between the two countries, marking another significant milestone in Sri Lanka -Maldives relations.
SEC Chairman Faizal Salieh said, “this MoU marks a new chapter and a significant milestone in the relationship between the two regulatory bodies and in our collaborative efforts to strengthen regulatory frameworks, promote market integrity, and facilitate greater economic integration between Sri Lanka and Maldives.”
He further said “Maldivian companies can benefit significantly from listing on the CSE, by embracing best practices of listed companies in Sri Lanka, access a wider pool of investors, leverage on our capital market infrastructure and achieve more accurate valuations for their stocks given the liquidity challenges at home.”
He also talked about the opportunity for listing debt instruments such as Sukuks, Sustainable Bonds and Development Bonds, and secondary listing of SOEs.
CMDA Chairperson, Aishath Zahira, said “We believe that this bilateral MoU will address the specific development needs of the Maldives Capital Market. Under the MoU, we will explore new access to finance alternatives for local companies, harmonize regulatory frameworks, and integrate systems for cross-border trading activities. Improving the governance of listed companies is also a key area of focus.”
Zahira thanked the SEC for its enduring friendship and development partnership, highlighting the potential to achieve greater impact by leveraging respective strengths and creating meaningful outcomes for both markets.
Following the signing of the MoU the CSE conducted a series of one-on-one meetings with several Maldivian listed companies including Amana Takaful Maldives Plc, Centurion Plc, Maldives Islamic Bank Plc, Maldives Transport and Contracting Company Plc, Dhiraagu Plc and Maldives Tourism Development Corporation.
By working together, both nations aim to create a conducive environment for sustainable growth, attract more investments, and ultimately enhance the prosperity of their capital markets and economies.
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