ECONOMYNEXT – Sri Lanka’s Securities and Change Fee (SEC) has accredited amendments to the Colombo Inventory Change (CSE) itemizing guidelines to supply better flexibility relating to the minimal public holding (MPH) requirement for firms itemizing by means of the introduction methodology, the regulator mentioned.
The pliability is given to spice up the share liquidity available in the market beneath its considered one of 12 key strategic initiatives, the SEC mentioned.
“The amendments replicate a joint effort by the SEC and CSE, underscoring sturdy collaboration between the regulator and the Change to deal with evolving market wants whereas sustaining market integrity, transparency, and investor safety,” the SEC mentioned in a press release.
The brand new modification will enable entities in search of itemizing by the use of an Introduction on the Important Board or Diri Savi Board with out minimal public holding on the time of submitting the preliminary itemizing utility.
Nonetheless, these entities must comply with a phased minimal public holding compliance framework. The modification permits companies to attain minimal 50% compliance with minimal public holding requirement inside 12 months and full compliance inside 18 months from the date of itemizing.
It can additionally enable private shareholders who’ve held their shares for a minimal interval of eighteen months previous to the date of the preliminary itemizing utility to divest as much as a most 2 p.c of their shares every month through the six months commencing from the date of itemizing.
This, nonetheless, is topic to a lock-in requirement of 30 p.c of their respective shareholdings as on the date of itemizing, till minimal public holding compliance or 18 months from the date of itemizing, whichever happens first.
Earlier than the modification, private shareholders can not divest their stakes for the primary six months from the date of itemizing.
Beneath the brand new amendments, entities ought to embody clear disclosures within the introductory doc confirming their obligation to fulfill private shareholders necessities inside the prescribed timelines.
The SEC additionally mentioned it has launched sure enforcement actions which will probably be applied within the occasion of non-compliance with the minimal public holding requirement.
“The revised framework is anticipated to encourage extra firms to think about itemizing through introduction, thereby broadening market participation, bettering liquidity, and contributing to the general improvement of Sri Lanka’s capital market,” the SEC mentioned.
“Issuers, traders, and market intermediaries will profit from a extra enabling but well-regulated itemizing setting.”
Sri Lanka’s primary The All Share Worth Index (ASPI) gained 41.7 p.c year-on-year in 2025 amid decrease rates of interest maintained by the Central Financial institution. Lack of share volumes has been one of many main points traders have confronted when buying and selling shares in Sri Lanka. (Colombo/January 02/2025)
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