SEC introduces lock-in periods, other amendments to CSE listings

The Securities and Exchange Commission of Sri Lanka (SEC) has decided to introduce additional conditions to the general listing requirements for public companies seeking listings on the Colombo Stock Exchange (CSE).

Accordingly, the SEC stated that CSE will be required to amend section 2.1 of the Listing Rules of the Colombo Stock Exchange.

Therefore, in respect of listings by way of an introduction. CSE will be required to delete the provisions relating to listing of equity by way of an introduction as a means of listing, with effect from April 1, 2012. However all under applications this category received on or before March 31, 2012 will be accepted, the SEC noted. Meanwhile in respect of listings by way of an Offer for Subscription, CSE will be required to introduce a lock-in period for all shares issued prior to an IPO.

Accordingly for shares held by the promoters and all other shareholders prior to an offering to the public, shall be lockedin for a period of nine months from the date of listing shares on the CSE.

Furthermore, where a public company has allotted shares within a period of one year prior to the date of the Initial Listing Application, all shares shall be locked-in for a period of twelve months from the date of listing on the CSE.

The SEC went on to state that where a company makes an application to list by way of an offer for sale, the shareholder/s considering divesting their shareholding through an IPO should have held such shares at least for a period of eighteen months prior to the date of the Initial Listing Application.

Under this category, the CSE will be required to introduce a lock-in period for all shares held by promoters and other existing shareholders, other than shares offered and accepted by the public through an IPO.

Accordingly shares continued to be held by the promoters and all other shareholders, at the time of the Initial Listing Application is to be locked-in for a period of nine months from the date of listing.

Moreover, the SEC stated that where a public company has allotted shares within a period of one year prior to the date of the Initial Listing Application, such shares will be locked-in for a period of twelve months from the date of listing.

(KP)