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CSE redefines sustainability by including more terms to support social and environmental projects in the country.
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Reinforce national goals, including poverty reduction, and access to education and healthcare.
The largest stock exchange in Sri Lanka, the Colombo Stock Exchange (CSE), has launched a new system called the GSS+ Bonds Regulatory Framework in the Sri Lankan capital market.
The new rules will guide special types of bonds that fund social and environmental projects.
With the announcement of this system, the stock exchange, which previously had only referred to “sustainability bonds,” will now cover a wider range of bonds, such as Green, Blue, Social, Sustainability, and Sustainability-Linked Bonds.
Social bonds play a constructive part in this. They are financial tools used to raise money for projects that address, among other social problems, increasing access to education and healthcare, generating job opportunities, and building affordable housing.
Of late, the global market for social bonds has noticed a surge, with more investors showing interest in projects that support inclusive and sustainable development.
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CSE’s rules are well enacted pursuant to the International Capital Market Association (ICMA) standards. This will bring trust among international investors in the country’s capital market, as they tend to support bonds that adhere to such global guidelines.
Also, the verification process for these bonds has been fortified. Issuers can now use Second Party Opinions and Certifications to provide extra assurance to investors regarding how their money is being used.
This follows the collaboration between the Asian Development Bank (ADB) and the Securities and Exchange Commission (SEC) of Sri Lanka, which aims to raise the island nation’s finance standards to meet global best practices.
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Mr. Rajeeva Bandaranaike, Chief Executive Officer of the Colombo Stock Exchange, said: “The introduction of GSS+ to the Sri Lankan capital market represents a significant step in our journey towards promoting sustainable finance. This initiative not only expands the suite of sustainable investment products available in the market but also empowers issuers to raise funds for socially impactful projects that can make a lasting difference in our communities.”
“We are proud to support this important development, which reflects our ongoing commitment to align capital market infrastructure with global best practices and to play an active role in Sri Lanka’s sustainable economic growth.”
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