Regulatory Alerts2017-10-10 | Payment and Settlement System Circular No 10/2017Implementing Measures to Avoid Use of Customer Government Securities as Collateral for Intraday Liquidity Facility
The Central Bank of Sri Lanka amended the LankaSettle System Rules and the Agreement on Intra-day Liquidity Facility to prohibit participants from using customer-owned or encumbered securities as collateral for intraday liquidity. These changes, effective 17 October 2017, mandate that only securities owned by the participant can be pledged and require transfers from the participant's own account to the ILF account. Violations of these provisions subject participants to daily penalty rates of 2 percent for borrowings up to Rs. 1,000 million and 2.5 percent for amounts exceeding that threshold.
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