The Colombo Stock Exchange is currently in talks with a Global stock exchange to set up the Multi Currency Stock Exchange that has been proposed for Colombo's Port City.

Speaking to The Sunday Morning Business, Colombo Stock Exchange (CSE) Chairman Dumith Fernando said that the CSE, CHEC Port City Colombo, and Port City Commission were currently engaging in preliminary talks with a global stock exchange which was keen on placing its footprint in Asia through the Multi Currency Stock Exchange at the Port City. 

In July 2021, a Memorandum of Understanding (MoU) was signed between the CSE and CHEC Port City Colombo with the objective of working on a collective mission to establish an International Multi-Currency Exchange within Port City Colombo.

Accordingly, the exchange will serve as a gateway for both regional and global investors, whilst also providing an ideal platform for Sri Lankan and overseas corporates to issue foreign currency bonds and equities as well as develop other financing and risk management instruments across asset classes.

Fernando said that the CSE was initially doing the groundwork required for the stock exchange and had an official meeting with the CEO of the relevant global stock exchange in December 2021.

"I think the next stage is to flesh out the investor model they want," he added.

He said that the CSE had involved the Port City Commission in the discussions as it was the property owner of the Port City.

He said another MoU would be signed with the Port City Commission in the future to facilitate the establishment of the Multi Currency Stock Exchange.

Unlike stock exchanges which are organised and have clearing houses, the currency market is unregulated, free, and private; no institution acts as an intermediary between the parties to guarantee that they comply with the obligations they have acquired. Each transaction is closed with a private contract between the parties.

The foreign currency market functions 24 hours a day for 5.5 days a week, opening on Sunday afternoon and closing on Friday, along with the New York market.

As it is a fundamentally unorganised market, the forex market has a large number of operations centres around the world. Among the most important are Tokyo, Singapore, Sydney, Hong Kong, Bahrain, London, Frankfurt, Zurich, New York, Chicago, and Toronto.

The US Dollar is the most traded currency in these markets (60%), followed by the Euro, British Pound and the Yen.