How to Open an Account

Launching Your Investment Journey in Sri Lanka’s Capital Market

Opening an Account at the CSE

If an investor wishes to conduct share transactions through the CSE, he/she should open a securities account in the CDS through a participant organization (a Stockbroker or a Custodian Bank).

Non-resident foreigners and non-resident Sri Lankans are eligible for opening the Foreign Individual (FI) accounts with the Central Depository Systems (CDS) of Sri Lanka to invest in the Colombo Stock Exchange (CSE) using the CSE Mobile App. The CSE Mobile App can be easily downloaded from "Apple Store" or "Google Play Store".

Apple App Store

Google Play Store



Please visit https://www.cds.lk/local-individuals/ for more details. A detailed guideline for non-resident account opening process can be viewed using the below

URL. https://www.cds.lk/pdf/cds_guideline/FI-Guideline.pdf

The applicant has to submit the duly completed Client Account Opening Forms, together with the relevant supporting documents, to the participant.

After scrutinizing the account opening documents, inclusive of the supporting documents, the CDS will register the applicant in the CDS system.

Once the registration process is completed, the CDS system will generate an acknowledgment slip (CDS Form 13) with the Client Account Number. This acknowledgment would be emailed to the applicant's registered email address confirming the CDS account opening.

Central Depository Systems (Pvt) Ltd

The Central Depository Systems (Pvt) Limited (CDS) is a wholly owned subsidiary of the Colombo Stock Exchange (CSE). Incorporated on 30 th August 1991, the CDS acts as a depository in respect of securities traded on the CSE and facilitates the settlement of securities that are traded. It also provides an electronic record of all listed securities that are dematerialized as well as safe keeping facilities such as holding securities in locked accounts.

The CDS has two types of participants categorized as Broker Participants (Member Firms) and Custodian Banks, The CDS has 28 Broker Participants and 18 Custodian Banks at present, an investor needs to open an Account with a Participant prior to trading with the CSE. Bank of Ceylon, Commercial Bank of Ceylon PLC, and Hatton National Bank PLC have been appointed by the CDS to function as Settlement Banks for trades carried out by Participants. The CDS is licensed as a Market Intermediary and Clearing House by the Securities and Exchange Commission of Sri Lanka (SEC) and is a member of the Asia- Pacific Central Securities Depository Group (ACG).

Who is eligible to open a CDS Account under the Non-Resident Category?
  • Individuals
  • Corporates or Institutions - Should be legally incorporated overseas
  • A Fund approved by the SEC - Country and Regional Funds that have obtained approval from the SEC
What is an Inward Investment Account (IIA)?

IIA is an account introduced for channelling inward remittances in respect of permitted capital transactions in Sri Lanka by non-resident investors and repatriation of any return of such investments. Authorized dealers (Domestic Banking Unit of a Licensed Commercial Bank and Licensed Specialized Banks) are permitted to open and maintain IIAs subject to the Directions No. 15 of 2021 issued under the provisions of Foreign Exchange Act, No. 12 of 2017.

IIA may be maintained in Sri Lankan rupees or in any designated foreign currency and may be held jointly by eligible investors.

As per the Directions No. 15 of 2021 issued under the provisions of Foreign Exchange Act, No. 12 of 2017, Permitted Credits and Debits to IIA are as follows:

Permitted Credits

  1. Remittances in foreign exchange received from outside Sri Lanka in favor of the account holder through the banking system.
  2. In the case of the selling the investments made through the same IIA under the regulations or provisions of the repealed Exchange Control Act or the FEA to another person (i.e. buyer), transfers, as sale proceeds from an IIA of such buyer.
  3. Claims received by the accountholder as determined by the Central Depository Systems (Private) Limited and Colombo Stock Exchange.
  4. Where the accountholder is a non-national resident in or outside Sri Lanka;
    • Any income and any capital proceeds, received from capital transactions undertaken by the account holder in Sri Lanka while being a resident in Sri Lanka, utilizing the funds out of salaries, superannuation benefits of the account holder [including Employees Provident Fund (EPF), Employees Trust Fund (ETF), gratuity and pensions or any other retirement benefits].
    • Transfers of USD 30,000 per annum from the Capital Transactions Rupee Account of the accountholder,

Permitted Debits

  1. Payments relating to capital transactions undertaken in Sri Lanka by the account holder, in terms of the permissions granted under the regulations or the provisions of FEA, to
    • A rupee account of the investee/seller (who is a resident) of the investment.
    • A foreign currency account of the investee or issuer who is a resident if the said investee
    or
    issuer is permitted to receipt such proceeds in foreign currency in terms of the foreign exchange regulations or special permission granted for such investee/issuer.
    • An IIA of another person (i.e, seller) in respect of the purchase of permitted investment.
    • An account maintained in Offshore Banking Unit of the investee if the investee has been exempted from relevant provisions of the FEA on investments into Sri Lanka under the Board of Investments Law.
  2. Payments relating to the investments in shares, debt securities issued by a company incorporated in Sri Lanka (i.e. investee) under the regulations or the provisions of FEA, to an Outward Investment Account of the investee, if such proceeds of the investment are to be utilized for the purpose of financing outward investment of the investee under the regulations or the provisions of FEA.
  3. Claims to be paid by the accountholder as determined by the Central Depository Systems (Private) Limited and Colombo Stock Exchange.

For more details, please refer

https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/laws/cdg/Foreign Exchange_Act_Direction_No_15_of_2021_e.pdf
If you are a Non-Resident Individual...

The CSE Mobile App can be easily downloaded from "Apple Store" or "Google Play Store". Please visit https://www.cds.lk/local-individuals/ for more details.

A detailed guideline for non-resident account opening process can be viewed using the below URL. https://www.cds.lk/pdf/cds_guideline/FI-Guideline.pdf

Once the CSE Mobile App is downloaded to the mobile phone of the non-resident individual, an App registration is required entering the foreign mobile number. Once the investor enters the foreign mobile number to the mobile app, he/she is categorized as a foreign individual. This will lead the applicant to a screen which will give the initial instructions to fill the online application.

You need to have an Inward Investments Account opened with an authorized Domestic Banking unit. You can conveniently open an IIA Bank account with one of our Partner Banks given below;

  1. HSBC
    Warren Lodewyke
    Mobile - 0768247886
    Email - warrenlodewyke@hsbc.com.lk
  2. Standard Chartered Bank
    Lasitha Wijeratne
    Mobile: 077-2960924
    Email: lasitha.wijeratne@sc.com
  3. Hatton National Bank
    Mr. Tyrone Hannan
    Mobile +94 777-712406
    Email - Tyrone.Hannan@hnb.lk
  4. Sampath Bank
    Pubudu Meddegoda
    Tel. +94 115406808 / +94 765290479
    Email - pubuduc@sb.sampath.lk
  5. Citi Bank
    Asela Ratnayake - Head of Financial Institution
    Tel: +94 114794710
    Email: asela.ratnayake@citi.com
    Kala Welihinda - Relationship Manager, Fl.
    Tel: +94 11 4796692
    Email: kala.welihinda@citi.com

If you want to open a CDS account by filling a physical application,

Please fill:

  • CDS Form 1 - Application for opening of securities accounts for Individuals
  • CDS Form 1(A1) - Know Your Customer Profile - Individuals
  • CDS Form 1(A2) - Declaration form
  • CDS Form 1C (Applicable only if an existing resident account holder acquires non- resident status)
Checklist of documents (To be handed in with the CDS Forms)
  • Copy of valid Sri Lankan Passport for Sri Lankan nationals
    Or
    Copy of a valid Foreign Passport for non-nationals
  • Proof of residency document as per the Rules issued by the Financial Intelligence Unit of Sri Lanka (same as resident individuals)
  • IIA/ CTRA account details with documentary proof (this document can also be used as Proof of Residency if the applicant's address is given in the Bank Confirmation)

To be noted:

If a non-resident applicant wishes to open an account giving a local correspondence address, sufficient information regarding the correspondence address should be provided (For example a valid residential visa).

If you are a Corporate or Institution incorporated overseas...

Please fill:

  • CDS Form 2 - Application for opening of securities accounts for Companies
  • CDS Form 2A -Know Your Customer Profile - Companies
  • CDS Form 2B - Declaration form to be submitted for Companies

Checklist of documents (To be handed in with the CDS Forms)

  • A copy of the Certificate of Incorporation of the company or equivalent
  • A copy of the Articles of Association of the company or equivalent
  • A copy of the certificate of Good Standing or equivalent (issued within a period of 1 year)
  • A certified extract of the Resolution passed by the Board of Directors to open the CDS account. The company can provide a certification in the relevant section in the CDS Form 2.
  • A certificate to commence business (where applicable)
  • Names, addresses, occupations and the passport numbers of Directors of the company (If the company is listed in a regulated Stock Exchange, only the names of Directors and the name of Stock Exchange should be given).
  • If the Director/s is/are a company, the following shall be furnished:
    • Name of the Director of the company
    • Date of incorporation
    • Place of incorporation
    • Registered address
  • Names and addresses of top ten (10) shareholders of the company issued within the three (03) months period preceding the date of the application to CDS (Not applicable if the company is listed in a regulated stock exchange)

To be noted:

  1. All the supporting documents in relation to local and foreign institutions should be issued b the Registrar of Companies/Applicable Authority of the country where the company is incorporated
  2. A document which certifies the new name of the company if the company has changed its original name
  3. If a person other than a Director of a Company signs the CDS Form on behalf of the applicant company,
    • A copy of the Power of Attorney/Board Resolution authorizing such person/s signature on behalf of the company
    • A copy of the National Identity Card/Passport of such person/s
If you are a Fund approved by the SEC...

Please fill:

  • CDS Form 2
  • CDS Form 2A
  • CDS Form 2B

Checklist of documents (To be handed in with the CDS Forms)

  • Copy of the document relating to the establishment and management of the Fund (Prospectus, Trust Deed or any other document acceptable to the SEC)
  • Name and address of the Fund, place and date of establishment of the Fund
  • Purpose/objective of the Fund
  • Copy of the document relating to the appointment of the Manager of the Fund or Trustee
  • If the Fund Manager/Trustee is incorporated
    • Name of the Fund Manager
    • Date of incorporation
    • Place of incorporation
    • Registered address

To be noted:

  • Sufficient proof that the Fund Manager/Trustee is incorporated (certificate of Incorporation from the Registrar of Companies or the Relevant Authority in its country of origin)
    Or
    If the Fund Manager/Trustee(s) is not an incorporated entity, individual names and addresses of the persons who are responsible for the management of the Fund
  • Sufficient proof in the form of a certificate/letter from a relevant State Regulatory Authority confirming that the Fund is registered/regulated by them. In the event the Fund is exempted from regulation, a confirmation from the Fund on the law under which the Fund is exempted, along with any other relevant proof acceptable to the SEC
  • Sufficient proof that the applicant Fund is legally permitted to invest in securities outside the country of its incorporation or establishment (Memorandum and Articles of Association, Prospectus or other relevant documents acceptable to the SEC
  • Sufficient proof that the applicant Fund is legally permitted to invest in securities outside the country of its incorporation or establishment (Memorandum and Articles of Association, Prospectus or other relevant documents acceptable to the SEC
  • Details of beneficiaries/unit holders of the Fund
  • Source from which the funds are generated for the Fund
  • Where there is a name change of the Fund, a copy of the official letter granting approval to the requested change of name of Fund issued by the relevant Regulatory Authority in its country of origin and a copy of the original letter granting approval to the Fund by the SEC or by the Ministry of Finance (if such approval has been granted by the Ministry).

To be noted:

  1. The person signing the documents on behalf of the Fund should be identified as follows
    • A certified copy of the Board Resolution/Power of Attorney authorizing such person to sign on behalf of the Fund
    • A copy of passport of such person/s
    • A letter from the participant confirming the name of the applicant, registered address of the applicant, name of the Fund Manager, registered address of the Fund Manager, and the place and date of incorporation of the Fund Manager (where applicable)
  2. The original of the certification or attestation or authentication of the supporting documents are to be provided along with the application for approval of the Fund
Who is authorized to certify the documents?

All the supporting documents in your checklist should be certified as follows as a true copy.

  1. By the Registrar of Companies or similar Authority, where the documents were originally issued
  2. By a Sri Lankan diplomatic officer of Sri Lankan consular officer in the country where the documents were originally issued
  3. By a solicitor, Attorney-at-Law, Notary Public, practicing in the country where the applicant resides,
  4. Custodian bank
  5. Global custodian - the custodian bank should certify the authenticity of the signature of the Global Custodian
    Or
    Stockbroker (applicable only in respect of individuals)
Opening an Account
  1. Client fills the form
  2. Client hands over the application to the Stockbroker with the supporting documents
  3. Client Risk Assessment and KYC verification carried out by the stockbroker
  4. Stockbroker makes the decision to onboard the client.
  5. Stockbroker opens the account
Way forward...

CDS eConnect - in line with the CDS digitalization drive, the CDS plans to revamp the CDS eConnect facility to provide a secure electronic business portal to facilitate an array of services to all CDS account holders. With the envisioned improvements, the accounts holders will be able to provide instructions to operate their CDS accounts to selected stockbrokers and to view their account details, including balance & share movements real time. Other services will include viewing & receiving notifications on corporate action entitlements, requesting for additional reports & contacting the stockbrokers through the eConnect facility.

Repository for nominations & transmission of shares - The CDS aims to centralize the process of submission & management of nomination records & transmission of shares after the demise of a shareholder. Existing procedure for the transmission of shares is considered as time consuming and cumbersome for all the parties related, especially in the event the deceased shareholder has a diversified portfolio.

Extending Online Account Opening Facility - At present the online account opening facility is open for local and foreign individuals and local companies, As the next phase of the project the CDS is planning to extend the facility to foreign institutional clients as well.

For Stock Market-related information

Visit CSE official website www.cse.lk for

  1. CSE Daily and Weekly Reports
  2. CSE Monthly and Quarterly Reports
  3. Annual Reports
  4. Listing Rules
  5. Member Regulations
  6. CDS Rules
  7. ATS Rules
  8. CSE Circulars
  9. SEC Directives
For more details, please go to...

@www.cds.lk

Or

cds.info@cse.lk

Also feel free to Contact a Member Firm or Custodian Bank