Sri Lanka has selected Millennium Information Technologies (MIT) to develop a sophisticated market surveillance system for the island's stock exchange, a top official said.

"We have selected MIT to design and implement the surveillance system," Channa de Silva, director general of the Securities and Exchange Commission told LBO.

"We are currently waiting for final approval from the Treasury, which should come within two to three weeks. After Treasury approval is granted the system should be up and running within three to six months."

The Colombo Stock Exchange (CSE) uses MIT software for equity trading.

The system will be designed on similar lines to the surveillance system used by the Indian market regulator, de Silva said.

"In these troubled times investors want properly regulated markets that are safe to make their investments," said de Silva.

"Higher returns are secondary concerns, integrity is very important for investors these days."

The Colombo Stock Exchange (CSE) was automated in 1991.

In 1997 MIT, now based in Boston, USA, developed the first event-driven trading system for the CSE. This included the central depository system which does away the need for paper based trading.