Sri Lanka’s capital market is navigating a defining phase, laying the foundations for a more resilient, innovative, and globally aligned future. At the heart of this transition is The Colombo Stock Exchange (CSE), which plays a key role in facilitating and steering capital markets through a critical point in time with a seasoned and capable leadership team. Punyamali Saparamadu, Senior Vice President – Commercial at CSE, has drawn on her extensive experience across financial markets and has been a key contributor in shaping the Exchange’s evolving role within the broader financial ecosystem.

Punyamali joined the CSE to lead the newly established Commercial Division, with responsibility for issuer relations, stakeholder engagement, advocacy, the commercialization of new Products, the monetization of data and the development of new revenue streams for the Exchange. The function was established to support the Exchange’s strategic priorities while enabling the parallel execution of multiple initiatives.

Her leadership approach has evolved in response to the rapidly changing dynamics of Sri Lanka’s capital markets. When she assumed her role in 2023, the country was emerging from the economic crisis, compounded by political uncertainty and subdued investor sentiment. The immediate priority of the exchange was to strengthen internal capacity, rebuild stakeholder relationships, and enhance the Exchange’s readiness to introduce and commercialize new products once stability returned.

As macroeconomic conditions gradually improved and early signs of recovery emerged in stock market performance within a low-interest-rate environment, the CSE transitioned to a more proactive, growth-oriented strategy. This shift resulted in intensified efforts across issuer engagement, the commercialisation of new products and advocacy initiatives aimed at unlocking innovation aligned with the Exchange’s long-term strategic priorities. A key objective of this strategy was the establishment of a sustainable issuer pipeline. Accordingly, engagement initiatives were expanded to include large conglomerates, as well as small and medium-sized enterprises (SMEs) and micro, small, and medium enterprises (MSMEs), with a focus on, strengthening governance standards, and supporting potential listings, including the acceleration of readiness through a hand holding framework. This issuer-centric approach was designed to broaden market participation, recognising that successful Initial Public Offerings (IPOs) attract both existing investors and new market entrants, thereby contributing positively to market liquidity and market depth.

She reflects, “Leadership in new product enablement focuses on providing clear direction to stakeholders operating within regulatory frameworks, maintaining close engagement with regulators, and fostering capacity building and innovation to support sustainable market development.”

Commercial initiatives within a stock exchange require rigorous stakeholder engagement and comprehensive feasibility assessments for enabling products, while ensuring alignment with multiple regulatory frameworks, including the CSE Listing Rules, the SEC Act, Central Bank directives, and Companies Act provisions. A thorough understanding of these regulatory interdependencies, together with clear communication and close engagement with issuers, has been critical to the successful commercialisation of several of the Exchange’s new products. In many instances, this process has also necessitated refinements to listing rules and internal processes to better align regulatory intent with market realities, without compromising governance standards or market integrity.

Alongside this disciplined approach, innovation in commercialization efforts and revenue diversification have remained central pillars of her leadership. Initiatives such as the bringing to market several issuers of sustainable finance instruments, including Green, Social, Sustainability, and Sustainability-linked (GSS+) bonds, high yield bonds, and Shariah compliant debt securities marked a significant shift in the Exchange’s approach to product development. 

Within two years of implementing the Green and Blue Bond framework, which later evolved into the GSS+ framework, the Exchange successfully attracted issuers across the green, social, sustainable, and blue bond segments, positioning Sri Lanka as a credible participant in the global ESG investment landscape. 

This progress was also achieved through extensive collaboration with the Asian Development Bank (ADB) and the regulator, Securities and Exchange Commission of Sri Lanka (SEC), and other development partners such as United Nations Development Programme (UNDP), International Finance Corporation (IFC), Expertise France, other regulators, issuers, and corporate finance advisors. The coordinated effort helped to build issuer competence and confidence and attract investor attention at a time when sustainability considerations were becoming increasingly critical to institutional and foreign investors. This move was also complemented by the mandatory adoption of IFRS S1 and S2 for top 100 market cap companies from 2025 onwards.

“The success of sustainable bonds demonstrates what is possible when strategic intent and stakeholder engagement converge to create market readiness. The key remaining challenge is enhancing issuer feasibility to support broader market adoption of GSS+ bonds,” notes Punyamali.

The CSE also recorded its first listings of Shariah-compliant debt securities and high-yield bonds during 2025. These products are expected to gain traction over the coming year, supported by further regulatory fine-tuning.

Throughout her professional journey, Punyamali has been guided by a consistent set of core values. Transitioning from the financial services sector into capital markets and operating in a new territory, required continuous learning and collective problem-solving, and leveraging on prior expertise to navigate challenges. Integrity and transparency have been equally vital in building trust among diverse stakeholder groups, for coordinating the collective efforts needed to introduce new products.

Markets will always face uncertainty,” she observes. “What matters is building the infrastructure that enables market participants to manage risks and returns efficiently. The CSE aims to facilitate this transition in the short to medium term.”

Liquidity remains one of the most persistent structural challenges facing Sri Lanka’s capital market. Addressing it requires a combination of market structure reforms, investor base expansion, regulatory support, and product innovation. Broad-basing investor participation remains a key priority of the Exchange, with reforms aimed at strengthening broker resources through agents and introducers and extending access beyond traditional urban investor segments.

The introduction of market makers across asset classes, especially equities, is viewed as a potential catalyst for improving liquidity, and enhancing price discovery. This would also support the rollout of new products such as Exchange Traded Funds and derivative instruments. The Exchange has responded to a Request for Proposal originated by the SEC to set up a Multi Asset Class Exchange in partnership with National Commodities and Derivatives Exchange in India with a focus on introducing derivative products.

Stimulating secondary market trading in the corporate debt market remains a priority, which however, requires targeted interventions, including the removal of withholding tax on coupon payments, addressing tax inefficiencies affecting collective investment funds, and improving transparency through enhanced price visibility and dedicated GSS+ bond targeted initiatives to promote investors investing in such instruments. Additional initiatives such as enabling repo transactions for corporate bonds and introducing well-governed algorithmic trading frameworks could further deepen liquidity while maintaining strong risk controls.

Technology will play a central role in the next phase of the Exchange’s evolution. Enhancing market confidence through robust regulation and surveillance is equally important. The implementation of advanced, AI-enabled monitoring systems would significantly strengthen market integrity, reduce manipulation risks, and improve transparency, key factors in attracting both domestic and foreign investors. The CSE is currently implementing a next-generation surveillance system with built-in AI capabilities, strengthening regulatory oversight and laying the groundwork for broader AI adoption.

Looking ahead, the Exchange is exploring the potential of digital assets and blockchain-enabled platforms, which could pave the way for new products, broaden investor participation, and further modernize Sri Lanka’s capital market infrastructure and dynamics. Data monetization initiatives are being expanded, creating new non-trading revenue streams while enhancing the value of market data benefiting revenue generation for the Exchange.

Resilience and disciplined execution have helped navigate organizational transitions and shifting strategic priorities, complemented by a strong emphasis on lean team structures, process efficiencies, and automation. Embracing emerging technologies, including AI-driven tools, has enhanced productivity and scalability, ensuring that limited resources are deployed to deliver the greatest impact.

At its core, Punyamali’s leadership philosophy is anchored in balance between regulation and commercialization, innovation, and long-term vision. By fostering clarity of regulations, empowering teams, and embedding adaptability into institutional frameworks, she continues to play a pivotal role in shaping a more resilient, inclusive, and future-ready capital market for Sri Lanka.