SEC steps up drive to bring private companies to market

An ambitious reform agenda was rolled out in 2025 as the economic recovery of the country gained momentum, and investor confidence strengthened. Securities and Exchange Commission Chairman Senior Professor Hareendra Dissabandara, in his review of the 2025 Annual Report, stated that the economy of Sri Lanka expanded by 5% during the year, supported by improved fiscal discipline, stronger foreign reserves and restored policy credibility. The long-awaited sovereign rating upgrade and exit from default marked a significant milestone in the recovery process.

Against this backdrop, the Colombo Stock Exchange recorded a strong rebound, driven by renewed investor confidence and increased market activity. A wide-ranging capital market reform programme launched under the theme “12 Pillars, One Vision for a Resilient Market,” aimed at modernising market infrastructure, strengthening regulation, expanding investment products and increasing investor participation.

A key development included the establishment of a Central Counterparty framework through CSE Clear (Pvt) Ltd, designed to enhance the safety and efficiency of securities settlement and align the market infrastructure of Sri Lanka with international standards. Sustainable finance initiatives also expanded, introducing regulatory frameworks for green, blue, social, sustainable and sustainability-linked bonds. The Colombo Stock Exchange recorded nine such bond issuances in 2025, raising approximately Rs. 54 billion and accounting for 40% of total corporate debt capital raised during the year.

The regulator intensified efforts to encourage more private companies and State-Owned Enterprises to access market-based financing, particularly as new Central Bank regulations on single borrower limits come into effect from January 2026. Investor protection remained a priority, with enhanced market surveillance, anti-money laundering oversight and public awareness campaigns targeting scams and unlicensed operators. Financial literacy initiatives were also strengthened, including collaboration with the Ministry of Education to promote financial education and the development of innovative learning tools aimed at broadening investor participation and supporting the long-term growth of the capital market of Sri Lanka.