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* Sri Lanka SEC issues new rules on Minimum Public Holding for listed public companies
Sat, Dec 21, 2013, 12:50 am SL Time, ColomboPage News Desk, Sri Lanka.

Dec 20, Colombo: Sri Lanka's share market regulator, Securities and Exchanges Commission (SEC) today announced new rules on the requirement of Minimum Public Holding for publicly listed companies to follow from next year to stay listed in the Colombo Stock Exchange.

All Listed Public Companies are directed to comply with the Rules on Minimum Public Float as a Continuous Listing Requirement issued to companies listed on the Colombo Stock Exchange effective from 1st January 2014.

The SEC said in a release that a sizeable public holding is a necessity for a transparent and liquid market and greater the public holding less is the potential for market abuse.

"Therefore, a minimum public holding as a continuous listing requirement is introduced with the aim of promoting a liquid and transparent market with a better price discovery mechanism," the SEC said.

Also, the maintenance of a minimum public holding is expected to provide a greater opportunity for public to share the wealth produced by the Public Listed Entities.

According to the new directive, a Listed Entity on the Main Board of CSE shall maintain, a minimum public holding of 20% of its total listed ordinary voting shares in the hands of a minimum of 750 public shareholders; or a market capitalization of Rs. 5 Billion of its public holding in the hands of a minimum of 500 public shareholders while maintaining a minimum public holding of 10%.

A Listed Entity on the Diri Savi Board has to maintain a minimum public holding of 10% of its total listed shares in the hands of a minimum of 200 public shareholders.

Furthermore, a Listed Entity at all times has to ensure that its public holding is maintained at or above the level specified by the above rules and it is the duty of the Listed Entity to monitor its compliance.

The Listed Entities are required to submit a report on the current distribution of shares effective on or before 31st March 2014, to the CSE and to the SEC.

The new rules will be effective from 01 January 2014.

The Public Listed Companies having a public holding below the specified levels as at the effective date shall comply with the Rules by 31st December 2015.

All Listed Public Companies have to be fully compliant with the rules by 31st December 2016.

Read Full SEC directive here.

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