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Thursday, 11 January 2018 - 22:06
Central Bank receives copy of Bond report
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The Secretary to President has handed over a copy of the Bond Commission report to the Governor of the Central Bank.

The CBSL said it received the copy yesterday.

A statement by the Central Bank said it has already implemented some of the recommendations therein, while measures have already been initiated to implement most of the other recommendations.

It said that a process of law reforms which commenced in mid-2017 is currently underway and new provisions/amendments to the MLA
as well as other key legislations including the Registered Stocks and Securities Ordinance and Local Treasury Bills Ordinance are
being formulated taking into consideration the current economic and financial environment.

A new Liability Management Act (LMA) is expected to come into force in early 2018. The LMA will give flexibility for active
debt management initiatives such as buy-backs, switching and pre-funding arrangements and it will minimize the rollover risk
of the underlying debt stock by altering the maturity profile of the outstanding debt stock.

An electronic bidding system for SLDBs will also be introduced and secondary market activity will be facilitated.

Mandating primary dealers and licensed banks to use an electronic bond trading platform for government securities transactions since
2016.

Voice Recording System (VRS) is used in the Front Office of the PDD and a CCTV system has been installed in the PDD. Access
restrictions are in place in the PDD and external visitors are required to register through a dedicated CBSL visitor registration
arrangement.

The CBSL also said that based on the supervisory concerns and non-compliances identified in the on-site examination report of Perpetual
Treasuries Limited (PTL) and other investigations, the Monetary Board issued Directions to PTL on 07/11/2016 curtailing their
levels of operation in the primary and secondary market and preventing the alienation of funds.

"Based on continuing investigations, further Directions have since been issued from time to time and as of now their business activities are suspended; and PTL is prevented from the disposal of assets, distribution of profits and making payments without the prior
approval of CBSL. The Directions are in force until 6th July 2018".

CBSL has frozen the assets of PTL held with CBSL and has informed the Securities and Exchange Commission to take appropriate action with regard to assets of PTL coming under its purview, the statement said.

The Central Bank said that it will initiate measures to carry out forensic audits carried out in relation to the issuance of Treasury
bonds during the 2008 to 2014 and the Treasury bond auctions held in March 2016.

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