SRI LANKA: SEC Approves New Listing Rules for SOEs

Thursday September 14 2023

On 14^th September 2023, the Securities and Exchange Commission of Sri Lanka (SEC) has approved the creation of a separate Listing Board and Listing Rules at the Colombo bourse to facilitate the entry of State-Owned Enterprises (SOEs) to the Capital Market.

This is in response to the Government’s policy to expedite reforms in SOEs, improve their overall governance, efficiency, productivity, profitability, and empower them to add greater value to the economy. These rules were developed under the guidance and direction provided by the SEC to the Colombo stock Exchange (CSE).

The SEC and the CSE have given due consideration to the current levels of governance, organization structure and operational challenges prevailing in the SOE sector and have therefore created a separate Listing Board and listing rules with a view to enabling SOEs to progressively transition from what they are now to what they should be. Any SOE that meets the Listing criteria of the Main Board or the Diri Savi Board can straightaway list on those Boards.

The new transitionary Board, when launched, will facilitate those SOEs seeking a listing to do on a set of new rules which are designed to enable progressive transition from the initial listing Board to the Main Board or Diri Savi Board. The salient features of the rules applicable to the new Board include a stated capital of not less than Rs. 250 million; revenue, net asset and market capitalization tests; minimum 3 years operating history; time – bound requirements for financial reporting; and a minimum 10% public float with 300 public shareholder requirement.

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