Perpetual Treasuries suspension has been extended by the Central Bank of Sri Lanka as regulators continue investigations into the primary dealer’s activities. The move underscores the regulator’s focus on market integrity and strict compliance within the government securities sector.
Perpetual Treasuries suspension extended as central bank probes continue
The Central Bank of Sri Lanka has extended the suspension imposed on Perpetual Treasuries Limited, preventing the firm from carrying on the business and activities of a primary dealer for a further six months. The decision, effective from 4:30 p.m. on January 5, 2026, reflects the regulator’s determination to allow sufficient time to complete ongoing investigations while safeguarding the stability and credibility of the government securities market.
The suspension has been enforced under regulations issued in terms of the Registered Stock and Securities Ordinance and the Local Treasury Bills Ordinance. These legal frameworks provide the Central Bank with the authority to regulate, supervise, and, where necessary, restrict the activities of primary dealers operating in Sri Lanka’s government securities market. By extending the restriction, the regulator has signalled that its investigative process remains active and that unresolved concerns continue to warrant regulatory intervention.
Perpetual Treasuries Limited, a licensed primary dealer, plays a role in trading government securities such as Treasury bills and bonds. Primary dealers are considered a critical component of the domestic debt market, acting as intermediaries between the government and investors. As a result, regulatory oversight of these entities is particularly stringent, given their potential impact on market confidence, liquidity, and public debt management.
According to the Central Bank, the extension of the Perpetual Treasuries suspension is intended solely to facilitate the continuation of investigations already underway. While the regulator has not disclosed specific details relating to the scope or findings of these inquiries, it has emphasised the need for due process and comprehensive examination before determining any further regulatory action.
Market observers note that extended suspensions are typically applied in cases where investigations involve complex transaction structures, historical trading activity, or potential breaches of multiple regulatory provisions. In such circumstances, regulators often require additional time to analyse data, review compliance practices, and assess whether enforcement measures or corrective actions are warranted.
The Central Bank’s action also reflects its broader mandate to maintain orderly market conditions and uphold investor confidence. By restricting the operations of a primary dealer during an investigation, the regulator aims to minimise potential risks to the market and ensure that trading activities remain transparent and compliant with established rules. This approach is consistent with international regulatory standards, where supervisory authorities prioritise market integrity over short-term operational considerations.
The Perpetual Treasuries suspension has implications for the wider government securities market, as primary dealers collectively support auction participation, secondary market liquidity, and price discovery. However, the Central Bank has mechanisms in place to ensure continuity in market operations, including oversight of remaining licensed dealers and adjustments to auction participation frameworks if necessary. These measures are designed to prevent disruption while regulatory processes continue.
From a governance perspective, the extension highlights the importance of strong compliance systems within financial institutions operating in regulated markets. Primary dealers are expected to adhere to strict ethical, operational, and reporting standards, given their privileged access to government securities trading. Regulatory actions such as suspensions serve as reminders of the consequences of failing to meet these expectations.
The Central Bank has reiterated that its investigations are being conducted in line with applicable laws and regulations. Any future decisions regarding the status of Perpetual Treasuries Limited will be based on the outcome of these inquiries and assessed against statutory requirements. Until then, the suspension remains in force, and the firm is prohibited from conducting primary dealer business during the extended period.
Analysts view the extension as part of the Central Bank’s ongoing efforts to strengthen oversight of the financial sector and reinforce accountability. In recent years, regulators have placed increased emphasis on transparency and risk management within institutions involved in public debt markets, recognising their systemic importance to economic stability.
As the new six-month period progresses, market participants are expected to closely monitor developments related to the investigation. The continuation of the Perpetual Treasuries suspension underscores the regulator’s cautious and methodical approach, balancing the need for thorough inquiry with its responsibility to preserve confidence in Sri Lanka’s financial markets.