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Wednesday, March 21, 2012

ATS-7: CSE transparency in question

By Hiran H. Senewiratne

Stockbrokers and investors yesterday expressed concern over the decision of the Colombo Stock Exchange (CSE) to install the latest Automated Transaction System (ATS-7) where the cost of the system was still a closely guarded secret despite broker firms being members of the exchange and investors contributing towards the upkeep of the CSE through various fees.

Many stockbrokers speaking to The Island Financial Review questioned the CSE’s of not making known the cost of the problematic system. "This has created skepticism among many of us," they said.

A top official attached to Lanka Securities (Pvt) Limited, not wanting to be named, said that the CSE had not divulged the cost of the newly installed the ATS-7 despite broker firms being members of the exchange.

He also said that the new system deprived brokers prime valid information, which the brokers earlier had. "The new system had taken off basic data from the system, which was created a major issue," he said.

Director/CEO Asha Phillip Securities Limited, Dimuthu Abeysekera, also said that he was unaware of the exact amount the CSE invested in the new ATS-7 and expects figure would be at least indicated in the CSE annual report.

Head of Research of Bartleet Religare Securities, Nikitha Tissera said that they, being one of the members of the CSE, was unaware of the cost incurred by the CSE for the ATS-7.

"Nobody knows how much the CSE has invested in the new system, which has certain issues that needs to be addressed soon to enhance the public confidence and to encourage trading with the CSE," he said. At present, the CSE consists of 15 brokering companies.

Good governance activist and a an investor at the CSE, former Chairman of the Ceylon National Chamber of Industries, K.C Vignarajah said that transparency is important for any organization, because the public is involved in the CSE.

"The recently installed ATS-7 in the CSE creates issues due to its technicalities and functions, due to transacting of odd slots of shares and high profile shares. But, these issues should be addressed soon by the CSE to keep public confidence in tack," Vignarajah told The Island Financial Review.

When asked whether or not the investing public had the right to know how much the CSE had invested in the ATS-7, Vignarajah said, "The CSE is like a club and therefore it is an internal issue, but it will benefit everyone if there was more transparency."

source - www.island.lk