Rules on minimum public stakes in listed SL firms effective July 1

New regulations governing non-compliance of minimum public stakes in Sri Lankan listed companies will be effective from July 1 (Saturday).
In an announcement on Thursday, the Securities and Exchange Commission of Sri Lanka (SEC) said it has instructed the Colombo Stock Exchange (CSE) to commence enforcement in respect of its “November-2016 Revision of Rules on Minimum Public Holding Applicable to All Listed Public Companies”. These enforcement measures were developed by the CSE under the direction of the SEC. 
Accordingly, companies found non-compliant with the minimum public holding requirement as of July 1 would be transferred to a Watch List (Default Board) on July 1, 2018 unless due compliance is achieved prior to that date, while others which become non-compliant after July 1 would be transferred to the Watch List within six months of such non-compliance or on July 1, 2018, whichever date is later.
“The present rules on minimum public holding were introduced by way of SEC directive in November 2016, and marked a significant enhancement in opportunities for compliance previously available to listed companies. The rules, envisaged as threshold requirements to be adopted on both an initial and continuing basis, took effect in January 2017, with a grace period of six months ending June 30, 2017 being extended to companies failing to comply with the requirement as of December 31, 2016,” the statement said. 
Other actions contemplated by the SEC enforcement policy include the making of timely market disclosures on public holding positions of non-compliant companies and disclosures on remedial action proposed by such companies. - ENDS -