John Keells Stock Brokers (Pvt) Ltd

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John Keells Stock Brokers (Private) Limited, firmly rooted in the blue chip conglomerate John Keells Holdings PLC, has grown from strength to strength. Experience and exper­tise has helped the company make its mark in the stock broking field, and JKSB now boasts a large and balanced client base with an equal mix of foreign, institutional and retail investors.

Trading is led by the Colombo Stock Exchange which is the sole authorized Stock Exchange in Sri Lanka. Moreover, there are several bodies that work alongside JKSB to ensure that all transactions take place in a smooth and systematic manner. They focus on areas such as legislation affecting the stock market, protecting the interests of investors, promoting professional standards and monitoring the development of capital markets, clearing, settlement and registration.

Backed by our expertise and in depth knowledge of the share market in Sri Lanka, John Keells Stock Brokers (Private) Limited is in the perfect position to advise and guide clients towards prosperity. Our portfolio of clients is impressive and it’s time to add your name to the list.

John Keells Stock Brokers (Private) Limited is committed to make sure you optimize your invest­ments in an ever changing market scenario. Based on our years of experience and a thorough understanding of the bigger picture, we offer you one-on-one wealth management advice with the dynamism and dedication that are the hallmark of our service.

The Colombo Stock Exchange (CSE)

The Colombo Stock Exchange (CSE) is a company established under the Companies Act No.17 of 1982. It is licensed by the Securities & Exchange Commission of Sri Lanka and is the only authorized Stock Exchange in Sri Lanka.

The Board of Directors is the main policymaking body of the Exchange. The Board appoints sub-committees and delegates power to formulate recommendations on day-to-day operations. The sub-committees are Capital Issues, Rules & By-Laws, Disciplinary & Arbitration, Research & Development, Finance and Listings.

The Central Depository System (Pvt) Ltd. (CDS)

The Central Depository System (CDS) is a wholly owned subsidiary of the Colombo Stock Exchange (CSE) and is in charge of clearing, settlement and registration.

Its functions are fully automated and act as a depository to hold shares in trust for shareholders of listed companies. Twenty eight stockbroking firms and 16 commercial banks provide custodial services for investors.

Custodian Banks have been granted participatory status, enabling them to utilize facilities and services offered by the CDS directly.

As a participant, the custodian maintains all securities with the CDS in the client’s name. Most custodian banks have tie-line facilities to the depository, enabling real-time information on their client’s share portfolios.

All physical scrips must be lodged with the Central Depository System prior to trading. The Central Depository System updates its records and dispatches the scrips to the respective company secretaries by the next working day. The Central Depository System maintains all securities accounts. Shareholders receive a statement of their holdings at the end of each month. Custodian banks receive a statement of holdings of their clients on a weekly basis.

The Securities & Exchange Commission of Sri Lanka (SEC)

In September 1987, the government established the SEC, a statutory body responsible for regulating capital markets, including the stock market. The Commission’s role is to protect the interests of investors, to promote professional standards and to advise the government on the development of capital markets.

The SEC regulates and governs the CSE. The body has the authority to determine requirements for new listings and the power to investigate misconduct in the market and to refer cases to the Attorney General for prosecution.

Legislation

The 1987 Securities and Exchange Commission Act, which set up the regulatory body, is the main legislation affecting the stock market.

Trading on the Colombo Stock Exchange

Opening a securities account

Opening a securities account to trade on the Colombo Stock Exchange is a straight forward process.

All foreign institutional and individual Investors are required to open a Securities Investment Account (SIA) via a local custodian bank.

If you would like a member of our sales team to walk you through the whole account opening process please share your phone details with us and we will get in touch with you promptly.

The most frequently used custodian banks in Sri Lanka by foreign clients to open a SIA accounts include HSBC, Standard Chartered Bank, Deutsche and Citi.

The SIA permits the foreign institution or individual to trade in any listed security without any restrictions or limitations on the repatriation of funds. Upon opening an SIA account, the relevant account holder will be issued with a Central Depository System (CDS) account number (example 4321 FC) which needs to be quoted when executing a transaction.

An SIA account would typically take two weeks to be opened by a foreign fund upon submission of all required documents and being vetted by the regulator, the Securities and Exchange Commission. A non-resident individual account typically takes 2 – 3 days to be opened upon submission of all required documents. For details regarding documentation required to open a securities account for foreign funds, company or individual as well as contact details of leading custodian banks in Sri Lanka please click here

For account opening forms and details regarding opening a direct securities account with John Keells Stock Brokers for a local institution or individual, please click here

Foreign ownership on the Colombo Stock Exchange

Foreign investment is encouraged and investment in companies listed on the Colombo Stock Exchange is unrestricted. Foreign ownership is permitted upto 100% in all listed securities except for a 40% cap on Plantations. Equity holdings in banks are restricted to 10% for any single local or foreign account holder or account holders acting in concert. Ownership in banks can be extended to 15% with the approval of the Monetary Board of the Central Bank of Sri Lanka.

Taxation

There is no Capital Gains Tax imposed on quoted securities, while a withholding tax of 15% is charged on dividends.

Disclosure requirements

A local or foreign client must inform the Colombo Stock Exchange upon acquiring 10% of a listed entity with the next level of disclosure coming at the threshold of 20%. Furthermore acquisition of 30% of the voting shares of a company by an individual/entity or a group acting in concert triggers a mandatory offer to purchase all outstanding shares in accordance with the take-overs and Mergers Code 1995 – (amended 2003).

Trading environment

Investors may place their orders with JKSB via Bloomberg mail/IB, office email, phone or fax with execution instructions. Foreign institutional and individual clients may also direct orders via one of our multiple global trade execution partners. For further information on our global trade execution partners please contact our foreign sales desk.

  • Trading on the CSE is fully automated
  • The Automated Trading System is linked live to the Central Depository System and is fully dematerialized
  • Trading Hours : 9:30 am to 14:30pm (local time)
  • Market Pre-Open : 9:00 (Closing price = VWAP of trades executed within the last 1 hour of trading)
  • Time in Force : GTC orders valid for 5 days
  • Minimum lots size : 1 share
  • Minimum tick size : 10 cents
  • Disclosed quantity is permitted but must be > than 25% of order size that is entered
Crossings (Block Trades)
  • Crossing can take places for trades on a particular security > Rs. 20mn or for quantities > than 5% of the issued quantity of the security
  • Crossings once entered cannot be amended but can be cancelled by the broker
  • Unmatched crossing expires in 15 mins
  • Crossings cannot take place at a price that is >5% below the previous closing price. There is no upper price limit on crossings.
Trade Settlement
  • Single Tier Settlement : T+2
  • Official Trade confirmations are emailed to the end client and local custodian approx. 45mins after close of trading seeking affirmation of trade.
  • Local custodian settles with broker on T+2 upon receipt of trade affirmation at T+1. If affirmation is not received by the custodian before banking hours close on the next market day, the trade gets rejected.
Cancellation of Executed Trades
  • Executed orders can be cancelled upon consent of the CSE and mutual agreement of both brokers provided the CSE is notified before market closes.

Brokerage Charges

John Keells Stock Brokers (Private) Limited is committed to make sure you optimize your investments in an ever changing market scenario. Based on our years of experience and a thorough understanding of the bigger picture, we offer you one-on-one wealth management advice with the dynamism and dedication that are the hallmark of our service.

Share Transactions Fee Structure is implemented on a step up basis and transactions up to the value of Rs. 100 million is fixed by the Colombo Stock Exchange and are common to all brokers. However transactions above Rs. 100 million are negotiable with a minimum brokerage fee of 0.2% being applied. Intraday trades will only have one side of the brokerage charged. Commissions earned on trades executed via foreign brokerages shall be equally shared by the foreign and local brokerages.

Given below is the break up of the fees for a purchase/sale transaction:

SHARE TRANSACTION FEES OF THE COLOMBO STOCK EXCHANGE (CSE) AND CENTRAL DEPOSITORY SYSTEM (PVT) LTD (CDS) WITH EFFECT FROM 27th JUNE 2017

Note 1. Illustration of Share Transaction fee Structure when applied on Step up Basis:
Note 2. Brokerage fees are indicated as a floor brokerage commission; actual fees may exceed this percentage