The June 30 deadline given to Registered Finance Companies (RFCs) for a stock market listing may be extended as most of these firms have not complied with this rule, Central Bank (CB) officials said. Only 15 of 36 RFCs have entered the Colombo Stock Exchange (CSE) following the CB ruling of listing all these finance companies by end June as part of its prudential regulation framework.
A senior CB official told the Business Times that several finance companies out of the balance 21 which are to be listed in the CSE have submitted their applications and the CB is in the process of examining some of them. ‘I don’t think that all these companies can be listed by June 30 and the Monetary Board of the Central Bank will have to consider an extension of the deadline evaluating it on a case-by-case basis,” the official said.
The CB issued a directive to all RFCs to get a listing on the CSE as part of an enhanced regulatory framework of the financial sector following the collapse of several finance companies including many managed by the failed Ceylinco group. These finance companies mobilized substantial amount of savings in the country and this directive was a move to increase the level of public scrutiny, accountability and transparency, he added. Three out of seven registered finance companies hit by the global finance crisis are now back in business owing to crisis resolution and regulatory measures taken by the CB.
He revealed that The Finance Company has completed the conversion of deposits to equity and its public issue had been completed. Some of these depositors however are opposed to listing, demanding the repayment of their deposits on maturity. They were of the view that acquiring troubled finance company shares will not bring dividends for them, as these shares cannot be traded at a high price at the Colombo bourse in the short run. |
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