CSE proposal facilitates local companies to raise foreign funds

The Colombo Stock Exchange (CSE) has submitted a proposal to list out the foreign currency denominated shares issued by the Sri Lankan-registered companies on the Colombo Stock Exchange with the aim of increasing the ability of local companies to raise foreign funds in Sri Lanka.

Foreign Exchange Orders No. 2 of 2021 does not permit to be debited to the Business Foreign Currency Account by the issuance of debentures or initial shares issued in foreign currency or the payment of dividends or the payments received by distributing of foreign currency.

The Monetary Board of the Central Bank of Sri Lanka has recommended the implementation of the proposal submitted by the Colombo Stock Exchange considering the factors such as increasing the interest of foreign investors in Sri Lankan-listed companies, attracting foreign currency into the country and increasing its participation, reducing the pressure on the Sri Lankan rupee and making an alternative instead of Sri Lankan companies going to foreign stock markets for collecting foreign exchange funds.

The Cabinet of Ministers approved the proposal tabled by the Hon. Prime Minister as the Minister of Finance to issue an order under Section 7 (1) of the Foreign Exchange Act No. 12 of 2017 amending the present Order No. 2 of 2021 to make the necessary provisions for the implementation of the said proposal and to submit that order to the Parliament for approval.