The Colombo Stock Exchange is the only stock exchange licensed by the Securities and Exchange Commission of Sri Lanka. It was nearly 107 years ago that, formalized share trading commenced in Sri Lanka under the auspices of the Colombo Share Brokers Association and trading was conducted under the rules and by laws formulated by the Association. In 1904, the Colombo Share Brokers Association (CSBA) changed its name to the Colombo Brokers Association (CBA). The share market at that time was small, elitist, and of marginal significance to the overall economy.

It was only as recent as in 1984, that share trading in Sri Lanka took a new turn with the establishment of a public trading floor and the introduction of the "open outcry" system of trading. In the year following, the Colombo Securities Exchange (GTE) Limited was established.

In 1988, the Colombo Securities Exchange (GTE) Limited, adopted new rules for listed companies thus replacing the by laws of the Colombo Brokers Association.

In 1990, the Colombo Securities Exchange changed its name to the Colombo Stock Exchange (CSE). During the same year, the 100% transfer tax on share transactions of foreign nationals was abolished. This gave a tremendous boost to the market and instilled greater dynamism among the capital market practitioners. The number of listed companies, market capitalization, turnover and the number of investors increased rapidly thereafter.

The clearing and settlement procedures of the Colombo Stock Exchange were automated in 1991 with the establishment of the Central Share Depository. This development permitted a scrip-less trading environment. The depository is known as the Central Depository System (CDS). The CDS is a wholly owned subsidiary of the CSE. This was followed by the introduction of a new set of trading floor rules in 1993.

In 1995 the CDS was upgraded and the Stock Exchange moved to a more modern location at the World Trade Center.

An Over The Counter market for trading of unlisted shares was introduced in 1996.

In June 1997, the Colombo Stock Exchange commissioned a state of the art computer based automated order matching system. The CDS was linked real time with the automated trading system. These developments placed the Colombo Stock Exchange alongside the most technologically advanced exchanges in the world. In late 1997 a two tiered system consisting of the Main Board and a Second Board for listing of companies was introduced.

In 1998, CSE became the first South Asian member of the World Federation of Stock Exchanges. The Central Depository System (CDS) also gained the membership in the Asia-Pacific Central Securities Group (ACG) during the same year.

The CSE introduced the Milanka Price Index (MPI) in January 1999 replacing the Sensitive Price Index (SPI). The MPI is revised annually and is conducive to the introduction of index-based instruments. It mirrors the changes in the ASPI and the issue of liquidity has also been addressed in the construction.


The CSE opened its second branch in Kandy in the year 2003 in keeping with its strategy to broad base and strengthen the local investor base and take the capital market to the people. The CSE's branch in Matara was opened in 1999.

In January 2004 the CSE launched a Total Return Index (TRI) series in addition to the Price Indices. The price indices reflect price movements of the underlying shares, whereas the TRI reflects returns due to both price changes and dividend income. The TRI is hence a better measure of returns from an investor's perspective.

The CSE officially launched its Debt Trading System (DEX) in March 2004. DEX enables the trading of corporate debt instruments and the beneficial interest of government bonds and treasury bills through the exchange. DEX has advanced features such as scripless trading, real time exposure management, multiple settlement cycles and compatibility with web based technologies.

E-mail : mail@sec.gov.lk