Tuesday, 27 April 2021 22:37

SEC allows state enterprises to list in the stock market. Featured

As part of furthering capital market development, the Securities and Exchange Commission (SEC) is promoting several new investment options, some of which are first-of-their-kind in Sri Lanka.

Several enterprises have already submitted applications to sell its shares via Colombo stock market Rajeeva Bandaranaike, CEO, Colombo Stock Exchange (CSE) disclosed:

Plans are underway to attract investors for several loss making state enterprises and state owned companies by listing it in Colombo Stock Exchange, he said.

He noted that the government has made a decision to list state-owned enterprises and also to divest government holdings in identified state institutions.

He noted that the CSE looks forward to working closely with the government on this initiative. The larger private companies, too, would naturally want to list when the valuations are right, and there is a push for investment within the economy when internally generated funds would be insufficient to fund their expansion and growth.

Chairman CSE Viraj Dayaratne PC noted that the SEC has approved in principle Special Purpose Acquisition Companies (SPACs) with the relevant framework in place.

Explaining SPACs, he said: “A sponsor (reputed individual or company) lists a shell company with an IPO.

Funds raised (from accredited investors initially) will be utilised to acquire willing unlisted companies. CSE has been tasked to come with the rule/guidelines.”

The SEC is also promoting ‘over-the-counter’ trading of paper gold products and the framework has already been approved in principle, he said.

The listing rules are designed to facilitate companies to list with minimum inconvenience.

Its listing fees are some of the cheapest in the region and the CSE is upgrading the process for initial public offerings (IPOs) so that issuers can bring their IPOs more speedily to the market.

They will be able to use mechanisms such as electronic applications, direct debits to bank accounts and the ability to do an IPO through a book-building process.

Further to this, the CSE has restructured the listing boards by introducing an alternate market to the main market and hope to attract listings for small and medium-sized enterprises (SMEs) through a specialised SME Board and dollar listings through a dollar board for foreign companies.




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